Plan to allow private firms compete for 10% of bus market

Private bus operators are to be allowed to compete for 10 per cent of the market under new proposals put forward by the National Transport Authority.

In a consultation document the authority said it considered the general economic interest would be best served by Dublin Bus and Bus Éireann retaining a substantial proportion of public service obligation bus services but not all of them.

Under the proposals the State-run bus companies would continue to operate these services for a further two-year period from next year but that some routes would be put out to competitive tender to commence service in 2016.

“The authority considers that tendering in the order of 10 per cent of the services would be of a scale that would encourage good competition and provide a satisfactory-sized operation against which to benchmark the existing operators.”

The authority said in the case of Dublin Bus services, the proposed routes that would be open to tender would be the orbital routes and some local routes around the city, eg routes 17 from Rialto to Blackrock, 33b Swords to Portrane, 111 Dun Laoghaire to Loughlinstown.

For Bus Éireann services, there are a number of options:

* All city services in Waterford

* Some city services in Cork

* Some rural stage carriage services in the south east region

* Certain Dublin commuter services

Possible combinations are:

* Tender the Waterford City and portion of Cork city services together

* Tender either the Cork city portion or Waterford City services together with a portion of the Dublin coastal commuter services presented above

* Tender the Waterford city and South East stage carriage services.

The chief executive of the NTA Gerry Murphy said the proposals were carefully balanced to introduce competition into the bus market in a structured manner that safeguarded the delivery of services for the customer and maintained the on-going improvement of the public’s bus services.

“Dublin Bus and Bus Éireann will be able to plan for tendering and a possible downsizing if they are unsuccessful. Private bus operators will be able to compete for 10 per cent of the market while the public will always have an integrated product offering although it may be delivered by a variety of operators. Experience from a range of countries has shown that competition has improved efficiency and services.”

The consultation process got underway at a time of uncertainty at Dublin Bus where staff went on strike for three days last month in protest at management plans to introduce a controversial cost-saving programme.

Minister for Transport Leo Varadkar is briefing the Cabinet today on plans for a "last ditch " intervention aimed at resolving industrial relations difficulties in the company over moves by management to generate savings of around €11 million.

Drivers at the company have rejected several sets of proposals for producing savings including those put forward by the Labour Court and Labour Relations Commission.

Yesterday the Minister said his department was looking at its options in the event of Dublin Bus going bust.

Mr Varadkar said he hoped it would not come to that but he maintained he needed to prepare for every possibility. If the company were to cease operating, “we could put public transport back together again”.

He said cost savings had not been delivered and that he simply did not have the option of putting any more money in. “If a strike were to resume, and I very much hope that it doesn’t, the company will be in breach of their contract [with the Government] again and realistically there would come a point where the company would not be able to operate any more as it would simply run out of money – there would be no fares coming in, no Government subvention coming in,” he said.

“This time last year CIÉ was on the verge of going bust. I took a decision with my colleagues to borrow and beg money from everywhere to inject another €36 million into the company,” he said. “ The difficulty is I don’t have that option this year.”

Separately, in a letter to the National Bus and rail Union (NBRU) last month, the Minister said the Attorney General had advised that if the National Transport Authority was to breach the 2008 Dublin Transport Authority Act in relation to the awarding of contracts for operating public service obligation bus services , “it could lead to a successful challenge to any future contract award to Dublin Bus, Bus eireann or indeed another operator”.

“In a nightmare scenario, we could end up with liberalisation ’taxi-style’” .

He said a chaotic and dramatic liberalisation would not be in the interest of staff nor passengers.