Oireachtas Joint and Select Committees

Wednesday, 17 October 2012

Joint Oireachtas Committee on Transport and Communications

Public Service Obligation Bus Contracts: Discussion

10:05 am

Mr. Gerry Mullins:

To take up the point made by Senator Mooney, what he described is two distinct markets. There are people in Sligo who want to get to Dublin quickly and efficiently. They want to get there in a couple of hours. If they can do that, they will abandon their cars and take the express service. There are people in Roosky and other small towns who want to travel between those towns. In Ireland, the inter-urban routes are often quite profitable. They are commercial routes. Galway to Dublin is a very profitable route at present. Cork to Dublin is probably less so, but it is still profitable. I do not know about the Sligo to Dublin route.

I imagine there is a market that would allow those services to be commercial. Those should be PSO, they should be moved off and people like those beside me and Bus Éireann should be able to compete for them. We should issue two or three licences to two or three different companies and let them compete on services. If they are separated by time, the consumer will go to the provider who gives the best service.

That is a commercial service. There are also small services between various towns in an area that, because of the population, will never be commercial services. They serve a social need and most developed countries identify the social need for transport between areas of low population. That is why they get a subsidy, the PSO. They are two different markets and while they can feed off each other, we have traditionally been excluded from providing services in the areas being described by committee members. We are not allowed to do it; it is a ridiculous situation. Most of the buses in this country are not allowed by law to provide the very service committee members are seeking. Only one company, Expressway, is allowed to do it. It might have its reasons for stopping or not stopping but it is convenient for the company to blame us. In the new situation it will not have the choice. It will compete for a service, the NTA will issue a licence that says the company must stop in Roosky eight times a day and if the company does not do that, it will lose its licence. If the people beside me win such a licence and the right to stop in Roosky, and do not do it, the licence will be revoked and I will not defend them. That is the beauty of the new system. The State, through the NTA, will have supreme control over the public transport system. At the moment, however, it does not. The Department of Transport, Tourism and Sport has no control over it. Politicians receive submissions from people asking why transport services are not stopping in their town but the politicians have no control. In the new situation, it will cost less, operate better and finally the State will have control over the public transport system.

Will a private monopoly replace a public monopoly or will we have an oligopoly, as Deputy Harrington asked? If we look at the list of members of the Coach Tourism and Transport Council of Ireland - Halpenny Travel, JJ Kavanagh and Sons, Matthews Coach Hire, Mike Hynan Coaches, J O'Callaghan and Sons, John McGinley Coaches, Joe Lawlor Coaches, Joe Moroney Coaches, Kane Coaches and Kenneally Coaches - all of our members are family-owned companies. They are small to medium-sized enterprises and often second, third or even fourth generation family businesses. The last thing we want to see is the situation the Deputy describes, where two or three companies swallow up the smaller companies. It would be entirely against my mandate as the head of this organisation to create the situation the Deputy described. We want to see a network of our members and other companies that are not members, other family organisations and other family companies. There is a bus company in every town in Ireland and all of those companies should have the right to compete to provide public transport services in their towns and counties. That is why we are here today.

How can I guarantee there will not be a private monopoly? It is a question that must be referred to the National Transport Authority later on. It is up to the NTA to enforce the measures provided for in the 2009 legislation to ensure there is no monopoly. Most industries have anti-monopoly legislation and we outlined earlier on in our presentation the comments of the Competition Authority. The two provisions we asked for in the presentation are the best ways to start to prevent a monopoly takeover. There should be tendering for small bundles of routes. If there are only tenders for large bundles of routes, for example, if all of Dublin Bus's services north of the Liffey were tendered out in one bundle, no one in our organisation would compete for it. Two or three large organisations from England, Germany, Spain and possibly the United States would be able to compete for it. If a small number of companies submit tenders for any products, the chances are there will not be a good price. A large number of companies tendering for a service will give a very good price. From the NTA's point of view, the more companies tendering for these contracts, the better.

I need some clarification of Deputy Dooley's second question. It related to the small bundles of routes and if they would end up being a burden on the State.