Mr. Martin Nolan:

I thank the Chairman and members for the invitation to attend.

As the biggest provider of regional and rural transport services in the country, Bus Éireann employs an estimated 10,000 people to deliver services on almost 5,000 vehicles, connecting thousands of locations and customers in rural areas on a daily basis. We work with the National Transport Authority to ensure city and rural stage carriage services are dovetailed with our commercial services and other public transport services to provide a vast integrated bus and coach network throughout the island.

Since emerging from the recession, Bus Éireann has been delivering an average of 3% year on year growth in the number of customer journeys and last year carried slightly more than 37 million passengers on its road passenger services. This figure excludes the 112,000 children we carry to school each day under the school transport scheme. From 2009 to the end of 2015, on our public service contract routes, we delivered growth in revenue per kilometre of 20%, with only a 4% increase in cost per kilometre. At the same time, State subvention was reduced by 26% per kilometre and the scale of our operations was delivered by 12% fewer staff than in 2009. While this might point to greater efficiencies being achieved by the organisation in a difficult period, it broadsides the need for continuous investment in the fleet and facilities and the requirement to achieve new standards in customer service which requires a longer term investment framework.

While Bus Éireann continues to expand its network and offer greater frequency and connectivity on services to improve its product, it needs steady State investment to underpin its growth ambitions. Above all, we must ensure safety is never compromised and members of the public will continue to benefit from the continuous improvements in technology, training, fleet and facility standards in line with best practice in Europe. We must keep pace and continue to invest for tomorrow’s standards for the future. All of these initiatives underpin our goal to be recognised as progressive and deliver on our mission to succeed by providing an excellent service for the public.

The financial difficulties we are experiencing on our commercial Expressway network which is not in receipt of a State subvention have been well publicised in recent weeks. I have repeatedly shared during our visits to this forum in the past ten years our concerns about the impact of the motorways on smaller towns and villages. I also advised the committee as recently as January this year that change was required to ensure the survival of Expressway routes across the country. In addition to losses of €5.3 million in 2015, we are forecasting losses of €6 million in 2016 for Expressway. The board and management have signalled that these losses cannot be allowed to continue and a solution must be found urgently. While we have reduced our cost base by €10 million or 20% since the recession started, new entrants on commercial routes with lower costs require us to be even more cost efficient to survive.

Bus Éireann continues to work with the National Transport Authority on the issue of commercial licensing to ensure a high level of and high quality inter-regional connectivity and balanced regional development. However, we continue to make the point that the supply of services must be matched with demand on every corridor to ensure the market is structured in such a way as to ensure it is not only competitive but also financially sustainable. It is not sufficient to focus on customer growth if the seat capacity provided is up to three times more than the level of demand on some corridors. We have to focus on filling existing capacity first.

It is vitat that Bus Éireann’s public service obligation, PSO, services, are fully funded and provide a reasonable surplus to allow for service enhancement and investment. In 2015 and 2016 we have delivered a significant expansion of our services, in conjunction with the National Transport Authority, and seen strong growth in passenger numbers emerging as a consequence. We need more of this, as well as collaboration with local authorities to bring about modal shift to reduce congestion and continue to support local economies outside the greater Dublin area. The PSO subvention for 2016 has been advised at €37.9 million and we are grateful for a further increase of €3 million received to date this year for the expansion of services sanctioned by the National Transport Authority. However, this should be contrasted with the 2009 level of subvention of €49.4 million. No business can survive long term without generating a return and we are in discussions with the National Transport Authority on the return applicable to the public service contract. The subvention for 2017 has not yet been agreed with the authority. The company has assumed, however, that a subvention will be provided to meet the net cost of the PSO contract.

While Bus Éireann has generated a range of cost efficiencies in recent years, the company also faces a number of potential cost increasing measures. Pay rate pressures linked with the external environment and a pay rate freeze since 2008 present key challenges at this time. Other cost increasing factors, however, include increased levels of congestion, our commitment to best practice in all safety related issues, the increasing culture of making claims and the associated increase in settlement costs and enhancements to customer services.

Taking all of this into account, we have articulated our vision for public transport with our stakeholders over recent years. The primary objective for prioritising investment in public transport should be the role of transport in supporting renewed economic growth, improving competitiveness and sustaining job creation. The evidence shows that public transport has a significant positive social impact, not just with regard to access to work or education but also with regard to access to health care, retail and leisure facilities and in facilitating tourism in urban and rural locations throughout Ireland. All of these mobility and integration needs are critical to the sustainability and regeneration of local economies throughout the country.

Any investment framework should continue to place a priority on the maintenance of the integrated national network that links all communities, urban and rural, and that fosters balanced regional economic development. Bus Éireann has been at the heart of this for generations. Balanced regional development should place a priority on lower cost alternatives such as a bus-coach transport network in a small island economy. Communities outside Dublin need to be assured that they will not be isolated in terms of social and economic inclusion and international competitiveness. While passenger growth is very strong on the core routes in provincial cities at present and investment in these networks should continue, further innovations such as bus rapid transit upgrades in cities like Cork and Galway should be examined. This, together with infrastructural improvements to prioritise bus corridors, would help ease growing congestion.