Mr. Aidan Murphy:

I thank the Chairman and committee for the invitation to address them today. I have served on the board of Bus Éireann since April 2013 and it is my great privilege to have been appointed chairman since July 2014. I am very pleased to have been nominated as chairman designate for another term. During my tenure, Bus Éireann has experienced profound challenges which have required major financial, cultural and structural reform, all of which are now being embraced throughout the organisation which this year celebrates 30 years of service to the cities, towns and villages throughout Ireland.

Over the past year, the financial difficulties facing the company have been well documented and underpin our steadfast commitment to ensure the survival and future sustainability of Bus Éireann. In 2016, our accounts showed that the overall financial deficit had increased to €9.5 million from €6 million in the previous year, and this trend triggered a comprehensive review of all aspects of the business. The original focus was to deliver a sustainable plan for our Expressway commercial services which, as the committee members will know, do not receive any State subvention. The combination of an increase in competition on the motorways with a high cost base brought about an unsustainable position which culminated in the directors appointing external advisers, Grant Thornton, to undertake a full appraisal of the robustness of management's business plan. When the findings were presented to the board in December 2016, an urgent fresh review of the business was requested when it became evident that the challenges facing the company were not only confined to Expressway but, rather, were more far-reaching.

The review confirmed that prevailing work practices, structures, business processes and some routes at Bus Éireann were simply not sustainable and required urgent intervention to ensure the future viability of the company as a whole. A new management team was appointed by the board of directors to lead a new change plan, and communications with staff began in January of this year. Unfortunately, when efforts at constructive engagement to address change failed, the matter was mediated through the auspices of the Workplace Relations Commission, which ultimately referred the matter to the Labour Court, which issued a recommendation. This was accepted by a majority of staff by ballot in May of this year. It is regrettable that a three-week strike took place during this process and I apologise again to our customers who were seriously discommoded during that period.

The Labour Court recommendation is the new cornerstone of our future and is currently being implemented. It includes more than 60 work practice change initiatives and 240 staff reductions, which is equivalent to 10% of the current workforce. Successful implementation of all the recommendations, which also include significant non-payroll cost savings, will deliver savings of approximately €20 million to Bus Éireann in a full financial year. This will not only restore the solvency and viability of the company but, crucially, set the foundation to ensure the business is capable of competing in an increasingly competitive market not only to hold existing business but also to win new business in the future.

On behalf of the board, I acknowledge the substantial commitment of our staff at this time to the survival plan which in itself has implications for many individuals throughout the organisation. I encourage our management and staff to continue to work together to ensure that the Labour Court recommendation is fully implemented. The hallmark of a successful implementation will be a business which is more efficient and more competitive. These two qualities will, I believe, not only safeguard the future of Bus Éireann but also open a gateway full of potential and possibilities. There is a new dynamic within the company and we can build a viable company that will continue to offer a first-class service to our customers. In the context of the advent of the bus market opening, the EU requirement for tendering of routes and continued competitive pressure on inter-regional corridors, it behoves us to deliver a plan which ensures the company is better positioned to compete effectively in this new era.

While we continue to expand our network and offer greater frequency and connectivity on our services to improve our product, we need steady State investment to underpin our growth ambitions, and in this regard I am pleased to advise the committee that we are positively engaging with our stakeholders on essential investment in our fleet, reasonable profit on our public service obligation, PSO, services, together with addressing the current underfunding of the free transport scheme, particularly on our Expressway services. I believe these commitments will be clarified over the coming weeks.

For my part, I want Bus Éireann to be recognised as progressive and to succeed by providing an excellent service to the public. We are the only national operator in Ireland with in excess of 250 routes and more than 50 years of experience in delivering a school transport scheme which is unparalleled in its scale throughout Europe. I assure the committee that the board will ensure that in our quest for cost savings, our position on safety will never compromised. In this regard, I am pleased that our swift decision to suspend all services in the best of interests of all of our customers and staff was recognised recently when Hurricane Ophelia visited our shores.

The future of public transport in Ireland is changing and Bus Éireann is committed to being part of that change. The establishment of the National Transport Authority, NTA, has changed the dynamic and many of the functions previously undertaken by the company are now the responsibility of the NTA. For our part, we recognise the fundamental change required by the company to become a high-quality service provider which can compete in the market and offer an unrivalled service to customers and provide real value for money to the State.

There is some ill-informed comment about the subvention to Bus Éireann. To be clear, we operate Expressway on a purely commercial basis with no subvention from the State. We operate city and stage carriage services under a PSO payment because they are not viable commercial services but the State judges them to be in the public interest. We also operate school transport services for the Department of Education and Skills. In this regard, we are no different from bus companies in the UK and Europe, except that we are owned by the State. However, our commitment is to provide value for money to the State and, as I said earlier, we now have the mechanism to achieve our objectives.

The board and management remain committed to delivering the best transport system possible in an efficient and effective manner given the funds available. Our commitment to delivering on the requirements of our stakeholders, such as the National Transport Authority, NTA, and the Department of Education and Skills, which we recognise are intensely customer-centric and efficiency-focused, has never been stronger. I look forward to working with the Minister, the Department, the NTA, CIE and the Bus Éireann board and management team in growing public transport in a sustainable, safe and efficient manner and to putting in place an investment framework matched to a new cost structure that can and will secure the long-term viability of Bus Éireann.