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Priority Questions. - Public Transport.

Tuesday, 26 November 2002

Dáil Éireann Debate
Vol. 558 No. 1

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 49. Mr. Naughten Information on Denis Naughten Zoom on Denis Naughten  asked the Minister for Transport Information on Seamus Brennan Zoom on Seamus Brennan  his plans for competition and deregulation in the bus sector; and if he will make a statement on the matter. [23828/02]

Minister for Transport (Mr. Brennan): Information on Seamus Brennan Zoom on Seamus Brennan I outlined in detail, as part of a statement to the Public Transport Partnership Forum on 7 November, my proposals for reform of the public transport market both within the greater Dublin area and in the rest of the country. My proposals on the bus market in the greater Dublin area are the result of extensive policy research, analysis and consideration by myself, my Department and the Public Transport Partnership Forum. In this reply, I intend to outline the proposals for regulation of bus services in the greater Dublin area.

As Minister for Transport, I will continue to set overall regulatory policy and approve the broad public transport investment strategy for the greater Dublin area. Within that framework, I will establish an independent body to procure public transport services and to allocate current and capital funding for specific purposes from an overall allocation provided by the Exchequer. I do not intend to deregulate the bus market in the greater Dublin area, but rather to introduce controlled competition in the form of franchising of routes or groups of routes. This will begin with new services and will be extended on a phased basis to the existing service network in the greater Dublin area. It is intended that the first phase of franchising will commence at the beginning of 2004, with up to 25% of the market being franchised out in that year, and there should be annual progress thereafter.

Long distance commuter services in the greater Dublin area will also be procured and regulated by the independent regulatory body. The body will be given responsibility for regulating public transport fares and setting and enforcing quality standards for public transport services. My proposals took particular account of the views expressed by the Public Transport Partnership Forum. In my statement to the forum, I made it clear that I was anxious to deal with these issues on a partnership basis, while also making speedy progress on reform. I look forward to discussions with the social partners on these issues.

[16]I have recently received a consultants' report, which was commissioned by my Department, on the regulation of bus services outside the greater Dublin area. I have published the report without commitment and I have invited comments on it from all interested parties. When I have considered the report and the public response to it, I will publish proposals for regulation of the bus market outside the greater Dublin area early in 2003.

Mr. Naughten: Information on Denis Naughten Zoom on Denis Naughten Why was the Steer Davies Gleave report removed from the Department's website only 40 minutes after it was published? Why is there such a stark difference between the conclusions in the report and its recommendations, which seem to contradict each other? Was this report altered within the Minister's Department?

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan If it was removed from the website I do not know why. I will look into it.

Ms Shortall: Information on Róisín Shortall Zoom on Róisín Shortall Will it be restored to the website?

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan Of course. It should be there. If it is not I will have it restored. We published it without commitment. To the best of my knowledge, the Department would not interfere with such a report but publish it as it was received.

Mr. Naughten: Information on Denis Naughten Zoom on Denis Naughten The report has been taken off the website and only the recommendations are there at present.

Two important issues in deregulation are funding and dealing with congestion. They are not addressed in relation to competition, as it relates to Dublin Bus, or the proposals to deregulate Bus Éireann. Can these issues be dealt with? How does the Minister intend to do this in the short-term? There are also question marks over the proposals for Dublin Bus and Bus Éireann. It is feared that the elements of deregulation and competition will not actually improve the level of service provided to the consumer. There are also serious concerns in the unions about competition and deregulation of the industry. The employees of both Bus Éireann and Dublin Bus received letters of comfort. Has the Minister investigated the financial implications of opening up competition within that sector?

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan Whether the bus system is totally State-owned or the private sector is allowed to compete will not affect the problem of congestion.

Mr. Naughten: Information on Denis Naughten Zoom on Denis Naughten It will still be stopped up.

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan We need the number of buses we need. The issue is whether the CIE group is allowed a total monopoly on the bus service. I have made my position clear and I would be pleased if the Deputies opposite also made theirs clear. I pay tribute to the great work of the CIE companies. I believe that in a market [17] of deregulation or controlled competition with franchises, they will match the competition, as they have done in the area of long-distance buses, beating it in many cases. Employment has grown and CIE now has a bigger market share. The same happens in aviation – the market grows when franchising, deregulation or controlled competition is introduced and the service is procured independently of the shareholder, who is also the regulator. I am unapologetically in favour of moving to that system. I would welcome equal clarity on the position from all sides of the House.

To deal with congestion in Dublin we must do practical things: finish the port tunnel, the M50 – once the problems in Carrickmines are sorted out – and the Kildare bypass and create more quality bus corridors to add to the ten or 12 we have. Every year €40 million or €50 million goes into traffic management systems. The Dublin Transportation Authority has many programmes to tackle congestion but the number of cars is growing very rapidly – there are over 1.3 million cars in the country although the number of households is 1.2 million. Low interest rates are encouraging more and more people to buy cars. I will not be the Minister for Transport who promises no more traffic jams – I will leave that to somebody else. It is difficult to keep up with the number of cars being purchased in terms of infrastructural investment. We are making every effort to do so.

The Deputy mentioned the unions. Through the Public Transport Partnership Forum I will engage in full consultation with the unions on these proposals. I will come back to the letter of comfort later.

 50. Ms Shortall Information on Róisín Shortall Zoom on Róisín Shortall  asked the Minister for Transport Information on Seamus Brennan Zoom on Seamus Brennan  the reason he sanctioned an increase of 9% in fares on public transport, especially having regard to the need to encourage more people to use public transport; and if he will make a statement on the matter. [23627/02]

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan CIE submitted an application for a fares increase to my Department in July of this year. The application was made by CIE in the context of losses that had arisen as a consequence of the expansion of services in recent years, increasing congestion, rising overheads and increased wage costs following recent wage agreements. I carefully considered the application taking into account the following criteria: the need to address the deteriorating financial position of CIE; an increase of approximately €12 million in Exchequer subvention for 2003. A total of €233 million in State subvention is being provided in the current year and this was increased to €245 million in the recent Estimates for 2003. There has been an 84% increase in the subvention since 1997; the significant capital funding being made available to the company under the national development plan; the fact that CIE has received only two fares increases over the last ten years [18] and fares have declined in real terms by approximately 20% over the period; and the need for reform of the public transport sector to improve the efficiency, effectiveness and customer responsiveness of the public transport system in response to changing demands.

Ms Shortall: Information on Róisín Shortall Zoom on Róisín Shortall It was interesting to listen to the Minister listing the things that have to be done to deal with traffic congestion. He did not include on the list the need to get people to move from private to public transport. I take it that is a central element of the Minister's policy. If that is the case, surely a fares increase flies in the face of that policy. The fares are already high by European standards. It seems an act of folly to put in place a further discouragement for people who are considering making the move from private to public transport.

What are the Minister's views on the level of subvention currently being provided to Dublin Bus? Does he accept that in spite of increases in recent years, by European standards the subvention is still extremely low, whether to the bus companies or to Iarnród Éireann? This is the fundamental problem in public transport. There is no ideological commitment to adequate funding which could provide a proper public service.

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan I agree with the Deputy that modal shift, as they call it in the transport industry – getting people out of their cars and onto public transport – is a policy that should be supported. I am trying to drive policy in that direction. It is changing – at one time we were trying to persuade people, by providing that service, not to buy cars but to get on buses and trains. However, we are now increasingly trying to persuade people not to use their cars every day but to leave them at home and get the bus, the train, the Luas and so on.

With regard to fares, we must remember the taxpayer. The consumer price index has gone up by 30% in ten years and fares have gone up by approximately 10%. That means that in real terms fares have fallen 20% in ten years. That is a significant fall. While passengers and consumers are very important, there are also taxpayers. This year's cheque from the taxpayer to CIE is approximately €500 million – that is €10 million every week. It is incumbent on any Minister for Transport, Government or Dáil to make sure that we demand a response to that. The subvention is not particularly high by international standards but it is growing rather alarmingly. This year, between current and capital, it stands at more than €500 million.

Ms Shortall: Information on Róisín Shortall Zoom on Róisín Shortall Why does the Minister say that the subvention is growing “rather alarmingly”? Should we not be aiming for at least an average European level of subvention for public transport? The Minister's reply indicates a particular ideological view of public transport services. Is it [19] not the aim to increase the subvention to bring it up to average European standards so that we can have adequate public transport services? Is the Minister aware that the price of the annual bus ticket has been increased by 19% from 1 January? What are his views on this?

In the greater Dublin area the business community is claiming that traffic congestion is costing it about €600 million per annum. Would it not make sense to increase the subvention substantially to the public transport companies and keep fares low, providing a real incentive for people to use buses and thereby clearing the traffic congestion in the city? I do not get the impression that the Minister has an overall plan.

Mr. Brennan: Information on Seamus Brennan Zoom on Seamus Brennan If I really thought that it was fares that kept people off buses, I would debate the issue with the Deputy. I have doubts that if fares were halved the numbers using buses would increase significantly. Fares would not change the habits of a lifetime for people. It is a factor but it is not the central factor. Other countries pay higher subventions but they also pay substantially more in income and corporation tax. As for the 19% increase on annual tickets, I cannot confirm the figure but I know it is in double digits. I do not control those fares in the same way as I control the ordinary fares.

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