Ms Anne Graham:

I will speak to those questions, including the tendering of the 10% of routes, as it is a function of the authority and not Dublin Bus. With regard to reasonable profit, the authority must operate in accordance with Regulation (EC) No. 1370/2007. We are required to establish provisions to avoid overcompensation in the case of directly awarded contracts for public transport services. The regulation states that reasonable profit is the rate of return that is normal for the sector in a given member state that takes into account the risk or absence thereof incurred by the operator by virtue of the intervention.

We have reviewed the case law precedent and considered various methodologies for determining an appropriate rate of return and we concluded that the determination of reasonable profit, based on return on equity, is the most appropriate approach for a direct award contract. In regard to the risk levels, they are not as high as would be considered in the commercial market. We also ensured that it was consistent with previous EU Commission decisions concerning public transport services contracts, and this method of assessing reasonable profit has been used in other member states.

The reduction in profit of €2 million for Dublin Bus was transferred to Bus Éireann to offset the losses it was incurring in that same year. We had done a previous movement of subvention from Bus Éireann to Dublin Bus to assist it in a previous year also.

The Deputy asked about commercial services. I will outline first what we do in regard to commercial services, which is bus licensing. If somebody applies to amend a commercial service, we can either grant it or refuse it. We cannot refuse if somebody intends to reduce their service but if they intend to amend their service to increase the services or to change the location and the bus stops, we can either accept or refuse that.