CIÉ bailout to exclude express buses

NONE OF the €36 million bailout for CIÉ will go to Bus Éireann’s Expressway services, Minister for Transport Leo Varadkar said yesterday.

Mr Varadkar said he could “absolutely and categorically state that the money will go to public service obligation routes and there will be no subvention of Expressway, which is a commercial service”.

Mr Varadkar intervened after private operators said they feared the €36 million would enable the State transport company to cross-subsidise Expressway services.

Public service obligation routes involve a subsidy paid by Government to ensure a bus service is provided in rural areas where it might otherwise be uneconomical. These are approved by the EU.

Expressway services are classed as commercial services and operate on routes between Dublin and the cities of Waterford, Cork, Limerick and Galway as well as between towns and to major airports. State subsidy of commercial services is illegal under EU rules.

Bus Éireann recently announced the launch of 28 new vehicles operating on its Expressway and intercity routes, including eight double-deck buses, the largest vehicles ever included in its fleet.

Gerry Mullins, chief executive of the Coach Tourism and Transport Council, which represents private bus and coach operators, said Bus Éireann’s Expressway services are losing money.

He said he was concerned any subsidy to Bus Éireann would prolong competition on what he saw as an unfair basis. Last July the council said it believed, based on CIÉ’s accounts, that the school bus service, which is supposed to be provided at cost, was making a profit. The council said this was supporting Expressway services, leading to unfair competition with the private sector.

At the weekend Mr Mullins again accused Bus Éireann of cross-subsidising Expressway services with receipts from the school bus service. He said he believed losses on Expressway routes were behind “the current crisis” at the national transport group.

Mr Mullins said private operators were awaiting the publication of the 2011 Bus Éireann accounts in a bid to verify their calculations but “mysteriously” Mr Varadkar had given the CIÉ companies “permission not to publish accounts until the end of September”.

Bus Éireann said Mr Mullins had made these claims previously and failed to substantiate them.

Spokesman Andrew McLindon said the company accounts were audited by independent accountants and had been approved by the Department of Transport and Department of Education, as well as the National Transport Authority, none of which had found any evidence of cross-subsidisation.

Barry Kenny, spokesman for the CIÉ group, said the reason the accounts had been delayed was because the company was engaged in significant cost reduction programmes and was negotiating with its workforce.

He said CIÉ had asked the Minister for additional time in view of the “exceptional circumstances” and the Minister had acceded to the request.