Mr. Gerry Murphy:

I do not propose to adhere rigidly to the text of the opening statement that was circulated to members. The committee has had a busy time and members may wish to move quickly to the question and answer session. In the interests of clarity, however, I will highlight some of the important points.

The NTA was established in December 2009. It is the national body with responsibility for public transport - bus, rail and light rail - throughout the State. We operate in five ways: first, we have a contract with Irish Rail in respect of the provision of rail services; second, we have assigned to the Railway Procurement Agency, RPA, the management of Luas light rail services in Dublin; third, commercial bus services - such as those provided by Bus Éireann, by means of its expressway service, Matthews Coach Hire Limited, J. J. Kavanagh & Sons and Aircoach - are licensed by the authority and are not the subject of State subsidy; fourth, we have contracted Dublin Bus and Bus Éireann to provide bus services throughout the State in respect of which there are public service obligations and which are the subject of State subsidy; and, fifth, we manage the rural transport programme - for which we assumed responsibility in the past six months - throughout the country. Many of the services relating to the rural transport programme are demand-responsive in nature and routes can be varied to meet people's requirements. These services are also the subject of State subsidy. For clarity, there are five sets of services throughout the State.

The contracts we have with Dublin Bus and Bus Éireann are extremely strong in nature and they confer on the NTA a number of weighty powers. We possess, for example, similar powers to Transport for London in the context of managing the bus sector. The contracts to which I refer contain strong performance requirements. I recommend that members visit our website in order to see these contracts and information relating to quarterly performance reports and to targets that have been met. It should be noted that 10% of the subsidy is reliant on the companies meeting their performance targets. We can alter and amend the contracts unilaterally in order that the public might be better served. All changes to these contracts are subject to approval by the authority.

I will deal now with what might happen in respect of these contracts after 2014. The contracts to which I refer are direct award contracts. The latter are allowed for under European law. Essentially, certain State operators can be directly awarded contracts to run services which attract State subsidy. We are considering whether, post-2014, we should continue with the existing contracts in full with Dublin Bus and Bus Éireann, whether we should open them up completely to tendering or whether we should open up some aspects of them to tendering and leave the residual aspects with those two companies. As part of this exercise, during the summer we engaged in a public consultation process. We published our consultation documents and sought the views of members of the public in respect of what we should do with the contracts post-2014 and with regard to whether new opportunities could be delivered by means of competitive tendering. This week we are going to publish those views in conjunction with our summary report. In parallel to this, we carried out a market consultation. As part of this, we advertised in the Official Journal of the European Union in order to elicit from international and domestic operators their interest in tendering, the forms of contracts they would require and their views on the allocation of risk in such contracts. The information we receive will assist us in determining what we should do.

During an earlier session, reference was made to TUPE. The latter relates to people's employment rights when a business or part thereof is taken over by another employer following a merger or transfer. TUPE is a statutory requirement. If there were to be competitive tendering and if this were to result in job losses in any of the State operators, the employees affected would be entitled to jobs with the private operators. Such operators, if they won contracts as a result of competitive tendering, would be obliged to offer jobs to employees such as those to whom I refer. The representatives from the Coach Tourism and Transport Council of Ireland, CTTC, indicated earlier that they are not so keen on the TUPE aspects. However, our market consultation indicates that international operators have no issue with these and are well used to operating within the parameters set down throughout Europe in this regard.

One of the key issues which emerged during the public consultation process is that people want integrated quality services. Whatever we do as an authority - in other words whether we open up a portion or the whole market - members of the public want integrated timetables and information and they like Leap cards and real-time information displays. One of the functions of the National Transport Authority is to manage all of these aspects centrally. We have operators within those arrangements and these would all be protected, regardless of whether there was a full direct award or whether, as a result of competitive tendering, some other operators entered the market. That is the position with regard to State contracts.

The second major strand in the context of bus provision is on the commercial side. We assumed responsibility for that function in 2010 and one of our first tasks was to prepare guidelines on how we intended to manage it. We produced comprehensive guidelines which had not previously existed. These were welcomed by the Competition Authority as providing a clear and level playing field for everyone. They apply in respect of Bus Éireann Expressway services and to the private operators who have entered the market. We introduced new timelines for our decision making in order to support the commercial responses. I am happy to say that we have maintained the standards relating to fast decision making in the context of assisting operators to arrive at commercial responses in order that they can get their vehicles out on the road to serve customers.

I would like to go into some detail with regard to the benefits of the commercial licensing arrangement and the constraints or limits relating to it. This goes to the heart of the issue of the withdrawal of commercial services from particular areas. There are strong benefits to the commercial licensing arrangement. It ensures that there are satisfactorily insured and qualified bus operators are providing public transport services. It also ensures that these operators are tax compliant. It must be noted that the commercial licensing system does not undermine the State services we are subsidising.

It does not undermine the services that exist for social need that we are subsidising. It does not take the strongly profitable routes out of that bag of services.

The other aspect of licensing is that it prevents unproductive on-the-road competition where one could have operators with competing and conflicting timetables not serving the customer, causing public order problems and could allow for predatory practices where someone could come in and undermine a successful operator who is providing services to the public and has long been doing so.

Last, it provides a tool to manage all the operators in the integrated ticketing-passenger information journey planner. There is nothing to prevent a licensed operator coming to us seeking to amend their licence. We would consider it just as if we were granting a licence, in terms of whether it would cause problems with the State subsidised service or another operator and if it is in the general public good. There is no provision in the Act for us to refuse an amendment where it does not conflict with either existing operators or with the PSO service. That goes to the heart of why we approve amendments that withdraw services. They are a commercial response and, provided there is no regulatory issue associated with them, we cannot constrain the commercial response to remove services because otherwise the operators might pull all the services. They have made a determination demand and then they determine that they might need to cease stopping in places. We cannot prevent them from doing so.

If a commercial operator starts to pull out of a town – it is not only Bus Éireann Expressway, but two other private operators have pulled out of multi-stop routes - we are then faced with the situation of how we fill the public transport gap. The problem is exacerbated at a time when there is falling public subsidy available for services. If additional subsidy moneys were available we could easily reconstruct a network of replacement State-subsidised services to deal with all the issues raised by members today and resolve them. The current circumstances make the task very difficult and sometimes impossible. What we are trying to do is examine whether we can reconfigure the State-subsidised services in those areas to include the stopping points without impacting on the cost of those operations because if there is a negative impact then more subsidies are required. Having taken over the rural transport programme it gives us an opportunity to examine whether it can fill in some of the gaps and improve connectivity to the major express services.

We recently advertised for a replacement service from Urlingford to Portlaoise via Durrow and Abbeyleix. We are in discussion with the winning tenderer. We have a number of tools that we can use. I would prefer that there was a pot of money available that we could then deploy and subsidise replacement services but that is not available at the moment so we have to be as clever and smart as we can with existing subsidised services.

On the rural transport service, my colleague, Ms Ann Graham, chairs the national integrating committee which looks at integrating HSE services with the Bus Éireann scheduled service and the rural transport services. The committee is also examining the opportunities on the school transport side in terms of the availability of excess capacity on return journeys. She is actively examining the issue with all of the partners. Throughout the country all the rural transport groups have set up working groups and they are actively involved in that area. To support that we have begun a review of all the public transport services in various regions. We have to move around on a regional basis because we do not have the capacity to do the entire State in one go. We did it in the south-east region and we are reopening the review to consider rural transport. We are doing the Border, midland and west region and we are looking at the south and mid-west regions at the moment. It is a time-consuming exercise. It would be nice to do such an exercise very quickly in response to some of the service challenges we face, and some of the lost services for rural towns, but we must get it right. We must work within the subsidies and try to reconfigure services and their integration so that we can do more with the same pot of money and increase the service coverage.

I tried to précis the points. I thank the committee for the opportunity to speak.