Varadkar set to privatise bus services

Minister for Transport Leo Varadkar will brief the Cabinet this morning on his plans for an overhaul of public bus services, an initiative with potential to create friction with unions in CIÉ.

There will be no Government decision today, but the initiative could lead to 10 per cent of the routes operated by Dublin Bus and Bus Éireann being put out to private tender as early as next year.

Amid ongoing talks within the Government and with the EU-IMF troika on the budget for 2014, the overhaul of bus services is one of the main items for discussion at today’s Cabinet meeting.

A further Government meeting on job creation is scheduled for Thursday.

A Government source said any private tender of bus services would include a “balance” between profitable and unprofitable routes.

The objective was to avoid providing an opportunity for private operators to “cherry pick” profit- making routes while leaving the public operators with loss-incurring routes.

Politically sensitive
The process is politically sensitive for Mr Varadkar, who is on the liberal wing of Fine Gael. However, the Government source insisted significant efforts had already been made to avoid any divisions with Labour over the plan.

A looming review of the services provided by the two CIÉ subsidiaries comes against the backdrop of sustained financial difficulties in the public transport group, which received a €36 million subvention from the State last year.

Bus Éireann ran a deficit of €6.2 million in 2012 and Dublin Bus incurred a deficit of €3.8 million.

Industrial relations in these companies are fragile. The National Bus and Rail Union staged a two-day strike at Bus Éireann in May over the cost cutting.

The dispute was resolved but not before a warning from Siptu that any resumption of the strike could spill into Dublin Bus and the Iarnród Éireann rail service.

The review of bus services is a condition of the Dublin Transport Authority Act of 2008, under which Dublin Bus and Bus Éireann were contracted to operate routes between 2009 and 2014.

Formal review
These contracts, overseen by the National Transport Authority, can be renewed but only after a formal review.

The authority is obliged to “engage in a public consultation process and report on the operation of the services to which the contract relates stating the reasons for amending the contract or entering into a subsequent direct award contract.”