Mr. Pat Burke:

The first thing is that the State has no legal obligation. This has been definitively decided by the High Court. That issue is subject to appeal to the Supreme Court but as of now and obviously on the assumption that the High Court prevails, the State has no legal obligation to put the matter out to tender. One then has an option. The State can obviously make a policy call to tender. Frankly, there are arguments that can made for and against that. The current arrangement has probably the significant strength that everything that is generated within the school transport scheme must remain within it. If there was any element of surplus in any given year, it is ring fenced entirely for expenditure on school transport.

The current arrangement also has the second significant advantage that the Department essentially has a demonstrated capacity to take money from it via the rebate. That was something that in the final analysis was within the capacity of the Department to impose. Those two characteristics are enormously valuable. There is then a call to be made as to whether the State would forego those characteristics and tender the scheme. If one was to ask my view, I would not be convinced of the value of that.

When we look at the scheme in its totality, there are essentially three core elements to it. The first is the €110 million, which is about two-thirds of the money. That is flowing through Bus Éireann to private contractors. There is no evidence available to me that a better deal would be achieved with anyone else running the scheme because there are very robust tendering processes underpinning it and the market essentially decides the rate there. That is the first element of the scheme which I am essentially saying would be pretty much neutral in any tendering context.

The second element is the Bus Éireann direct provision - ball park €30 million to €33 million. There are good strategic reasons for Bus Éireann direct provision. It is an advantage for Bus Éireann to have a fleet available that can step in in any set of circumstances if the market is not available to provide the service, if there is evidence of any type of cartel behaviour in the market and so on. The fact is that this element of provision has been declining in any event but there is a very strong argument that it would be extremely injudicious of the State to have this scheme entirely reliant on a range of contractors around the system without some capacity to underpin it in the final analysis in the event of failure of provision. What I am saying is that in respect the second element, albeit the fact that it is the smaller of the two I have mentioned, there is no overwhelming strategic reason tendering would be of any great benefit. I am offering it as my judgment.

The final element is the transport management charge. That is travelling at about €15 million at the moment. The Department has a demonstrated capacity. If it feels at any point that this transport management charge contains any form of surplus that is unwarranted, it has a demonstrated capacity to intervene and extract from that transport management charge, via rebate, an amount which it might determine.

While it is a policy matter for the State to decide whether it would tender the scheme, that judgment call would have to be made in a very considered way and in the round. If it were to tender, I suggest it might not tender that which exists. It might choose to tender for a strategic fleet of last resort and separately for an overall management of the scheme. It is a very major issue which would require deep analysis.