Mr. Owen Reidy:

We are grateful to the Chairman and the committee for facilitating us to make a presentation on the NTA’s decision to effectively outsource and tender 10% of routes operated by Bus Éireann and Dublin Bus in 2016. We note there has been a real lack of public debate on this matter. While there has been much debate at this committee and its predecessors, there has been a lack of public debate outside of this forum on national or urban public service transport provision among the public, communities and local elected representatives. While the NTA has gone through the normal consultation process on this proposal, it has been very narrow and its consequences have not been fully thought through, the implications of which are potentially grave. We are pleased the NTA came to the decision that, based on economic interests, it made complete sense to continue with the direct award model, giving Bus Éireann and Dublin Bus 90% of contracts for another five years. However, we do not understand why 10% would be tendered out beyond the direct award model. It does not seem to make any economic sense or logic.

We believe the process is flawed. Essentially, the NTA, with the support of the Government, seems to be looking at what is potentially a very dangerous experiment which could have much wider consequences. Our concern is that this initial 10% offering could be the thin end of the wedge.

There are a number of areas where the NTA's stated objectives have not been fulfilled by the decision it took in December 2013. The first area is that of value for money for the Exchequer, something that is of importance to all of us - the committee as elected representatives of the people and the likes of us as a trade union that represents up to 2,000 people and the largest civic society organisation in the country. We believe the NTA's decision mixes up and conflicts cheapness with value for money. There are a number of criteria we look at. The Deloitte report, which was discussed in this and other forums in 2009, looked at the efficiency and cost of Bus Éireann and Dublin Bus to the Exchequer. It came to the clear conclusion that the subvention and PSO obligation offering received by Dublin Bus and Bus Éireann is low in comparison with many European counterparts. That was in 2009. Since 2009, year on year, we have seen the subvention being cut for each of the three CIE companies. We estimate that the subvention for Dublin Bus has been cut by in excess of €20 million over that period. There is no magic formula as to why the decision to cut the subvention has come about. There is no criterion or formula laid down that deals with the subvention. If it was value for money in 2009 and we have had five years of cuts, it is certainly value for money for the Exchequer in 2014. There is another cut this year.

It should be noted that while the two bus companies have been dealing with the recession like all entities, falling passenger numbers during that period which obviously affected revenue and the reduction in the subvention, they have restructured on two occasions. The staff in both companies represented by us and other unions have done not just one restructuring agreement but two. The first one in 2009 was very comprehensive and saved €34 million in Dublin Bus. The second one was in 2013. It was well documented that there were two disputes in both companies. Very difficult and comprehensive negotiations took place. Workers who felt that they had already given were being asked to give more. Given that workers came to the conclusion that they were prepared to make personal and financial sacrifices for a second time in four years to support the viability of their company, the timing of this NTA decision is seriously problematic. People have tightened their belts and made sacrifices and now they have been told that 10% of the routes they operate might go out to tender.

Keeping it very simple, if one looks at what is required to operate an urban and national bus system, one sees that there are a couple of entities involved in costs such as fleets, fuel and logistics that are fairly static and the same all around regardless of whether it is public or private. The significant variable where there is potentially a huge difference is labour costs. Our concern is that the logic seems to be that we will outsource 10% on this occasion to the private sector as a guinea pig and save money. This is a black and white view of the world that private will be cheaper than public and that it is the way to go at all costs.

Our concern is that what could be hit are labour costs. We make no apologies. We have two interests here. We represent our members and want to advocate and protect their terms and conditions of employment but we also have a dual interest in trying to protect what we believe is an important element of core public transport for the travelling public for its social and economic dividends. There is an issue of the transfer of undertakings legislation that has been referenced in many documents relevant to this. The EU directive led to the Dublin Transport Authority Act 2008 talks about the Transfer of Undertakings (Protection of Employment), TUPE, Regulations 2006. Ernst & Young was asked to put together technical documents as part of the consultation talk about the TUPE issue. Clearly, the NTA document where it decided on this course of action in December 2013 made it clear that transfer of undertakings would apply. What that effectively means is that if Dublin Bus or Bus Éireann are not successful in tendering with other competitors for the 10% of routes and operator A or B gets them, the workers affected in Dublin Bus and Bus Éireann would transfer under their terms and conditions of employment, excluding pensions. Pensions are regrettably not covered under the legislation.

If one takes that to its logical conclusion and if the incoming operators who also inherit collective bargaining, collective agreements and the two unions were to honour the letter of the law, the rates of pay should be protected so there is no saving on labour costs. Even the Ernst & Young document makes it very clear that in the short term, there is very little potential in savings by taking this course of action. What are the savings? Where is this extra value for money? When the Ernst & Young document talks about the economic analysis, it makes it very clear that public transport is a spur for economic activity and very important for social and economic ends. We appreciate that there is a finite amount of resources. Our argument would be that in a time of economic retrenchment and crisis, the Government and the political elite should be looking at subventions going up rather than down as a spur and boost to public transport and to build confidence into this system.

The second area that the NTA is making clear is a fundamental objective is compliance with contracts. I am sure it is something we would all agree with. Contractors must comply with the regulator's requirements. It is a key objective. One could understand if the two incumbents were reckless or were not hitting or exceeding their targets, some might suggest this is the road to consider. Even a cursory look at the data that is out there, which is NTA rather than Bus Éireann or Dublin Bus data, shows that on nearly all indicators, Dublin Bus and Bus Éireann hit and exceed targets. The target percentages are usually between 95% and 98%. Here you have two operators that are hitting and exceeding their targets notwithstanding the challenges they and their staff have been through.

A third area of importance is that of improved customer experience. The committee will be aware that with the co-operation of their staff, Dublin Bus and Bus Éireann have done quite a lot in conjunction with the regulator to try to improve the customer experience be it real-time passenger information, the development of IT with apps, the journey planner, working on the Leap card process or making sure that 100% of the buses are fully accessible. I note the National Disability Authority highlights that in its performance for Dublin Bus and Bus Éireann and raises concerns and questions as to whether that would be the case if private operators came into the market as is potentially intended. In the Behaviour & Attitudes studies, it seems to be coming through that the customer experience for both entities has improved as well.

I know people will say that we are not adopting the British model as it is 10% but we see this potentially evolving where it is 10% for five years and potentially 20% and 30% subsequently. If one looks at the British experience of deregulation, one can see that there has been a drop in usage, confidence and satisfaction for customers when it comes to their overall experience. There are problems in Newcastle where there is a row between the private operators and the incumbents over ticketing and integration. In places like Sheffield, there has been a 40% drop in usage while there has been a 30% drop in usage in places like Manchester. Consumer confidence has not given its seal of approval in Great Britain and we need to learn from the mistakes of our nearest neighbour and act accordingly.