Mr. Martin Nolan:

I thank the Chairman and members of the committee for the invitation to discuss the company’s recent changes to certain interregional Expressway routes. I am accompanied by the chairman of Bus Éireann, Mr. Aidan Murphy, and one of our regional managers, Mr. David Lane.

As the company’s business structure may appear complex due to the integrated network it provides, I would like to clarify the position of Expressway vis-à-visthe other services we provide. While our integrated network provides great benefit to rural communities, the company must account financially for each product on an individual basis. Funds generated by the PSO remain within the PSO network. Any surplus arising on school transport is ring-fenced for reinvestment in the school transport scheme and Expressway can only access funds it has generated itself. While the company will report a surplus for 2014, Expressway itself earned less than €500,000 for the year. While this result represents a significant improvement on previous years, it still leaves much work to be done to make the product financially viable.

Bus Éireann’s overall strategy is focused on providing safe, value-for-money and customer centred transport services to urban and rural communities in an effective and efficient manner across three main product areas. First, we continue to work in partnership with the National Transport Authority to negotiate and deliver the best possible public transport offering for PSO services provided under direct award contract outside the Dublin metropolitan area. Work programmes are focused on passenger and capacity growth on the core network as the economy recovers, supported by fleet replacement, facilities and infrastructure investment. Second, we are delivering further cost savings and efficiencies in the provision of school transport services on behalf of the Department of Education and Skills. Third, we continue to develop the commercial interregional Expressway brand along with network improvements for faster journey times and more competitive fares. Despite the recent changes, Expressway continues to play a vital role in connecting local transport networks to urban centres across the country without receipt of PSO subvention.

In his presentation to this committee last July, our chairman, Mr. Aidan Murphy, pointed out that Bus Éireann has been in survival mode in recent years. The company worked its way out of the recession but we are conscious that there will be a restricted Exchequer purse for the foreseeable future. Bus Éireann remains committed to working with its stakeholders to deliver the best transport system possible in an efficient and effective manner given the funds available. Bus Éireann has unfortunately been required to make hard decisions to ensure financial sustainability. We have delivered on all of our commitments to the NTA, the Department of Transport, Tourism and Sport and the Department of Education and Skills. The ingredients for a sustainable public transport system are being delivered.

In respect of PSO services provided under contract to the NTA, we are focused on identifying the range and level of public transport services required outside the Dublin metropolitan area over the period of the five year contract to 2019. It should be noted that as the PSO subvention has been significantly cut in recent years, the scope for maintaining local public transport services out of the existing PSO payment has been eliminated. For the avoidance of doubt, members will appreciate that the contract with the NTA does not in any way include Expressway services. We do not receive any PSO payment from the NTA for the delivery of our Expressway services. These services comprise 23 interregional routes that operate across the country, linking cities and population hubs and now served by our distinctive large red and silver coaches. Expressway must generate its own funds for investment in new coaches to survive in the long term.

I will now outline the changes that we have implemented on our commercial Expressway services over the last few years, the latest of which relate to routes 5 and 7. The changes that we have made on Expressway services in recent years are due to competitive pressures brought about by the increased availability of commercial licences, locations being bypassed by motorways and the changing needs of our customers. The vast majority of our Expressway customers want faster interregional journeys between the main population concentrations, where possible using the motorway. I previously shared our concerns about the impact of the motorways on smaller towns and villages with Oireachtas committees in 2008, 2009 and 2012. I also advised that changes to a number of our commercial Expressway intercity routes were required to ensure their survival and to protect local jobs given the increasing liberalisation of the market and what I would call cherry-picking of routes by private operators. Nothing has changed in this regard. Competition on Expressway routes has increased since 2012 and, unfortunately, most of what we predicted has come to pass. As a company, if we do not make changes required by customers, Expressway will go out of business and jobs will be lost both within Bus Éireann and among the wide range of suppliers that depend on Bus Éireann across the country. We cannot trade recklessly. Expressway has to make a commercial return on its routes to enable fleet replacement because it does not receive any funding for buses or coaches on these routes.

In the past, and as part of the social dividend we returned to the State, we provided Expressway connections to many of the secondary locations that have now been bypassed as a result of the expanding motorway network. With the increased level of licensing for direct services to and from the main population concentrations, our ability to service many of these secondary locations in a sustainable manner has been eliminated. Since the legal changes to our roles introduced in 2009, the NTA is ultimately responsible for the transport solution for the towns affected by our recent decisions on routes 7 and 5. The NTA's role is to determine the most efficient public transport alternative. Funding is obviously integral to any decision it makes. We will continue to work with the NTA to inform its decisions and we will bring our own proposals to the table.

As part of the Expressway turnaround programme in recent years, our Expressway services have had to come out of about 17% of secondary locations. However, in most cases an alternative public transport connection exists or was made available. Overall, there has been no widespread loss of services to rural locations as a result of the decisions we have to make, despite what some commentators have tried to suggest. In this regard, I underline our steadfast commitment to serving rural Ireland. As the biggest provider of rural transport in the country, almost 10,000 people help to deliver our services every day. These people work and live throughout the towns and villages of Ireland, with their wage packets contributing to the sustenance of local economies. We are proud and dedicated in our commitment to rural Ireland and to the provision of jobs and services in these communities. I would like to emphasise this point given our heritage of transport service which dates back now to the 1930s.