Mr. Martin Nolan:

I thank the Chairman and committee members for the invitation to provide an update on the company's interurban and Expressway services and the dovetailing of the rural transport services with the Expressway network. I reiterate our commitment to serving rural Ireland and connecting the people in these communities with the wider network. As the biggest provider of rural transport in the country, almost 10,000 people help to deliver our services every day. We are proud to be associated with the provision of jobs in rural Ireland.

As is any service industry, we are very reliant on our employees, whose dedication and commitment is among the highest In Ireland. More than 80% of our staff are customer facing, and last year we were very proud to be recognised by the Reputation Institute as having the 42nd best reputation in the country. We had the second biggest increase in placing among the top 100 companies in Ireland. This is entirely down to the attitude, commitment and competence of our people, who went to extraordinary lengths again during recent weather events to keep the travelling public connected in most of rural Ireland.

In 2015, Bus Éireann had almost 80,000 passenger trips, including those by school-going children. This demonstrates the critical role our organisation plays as part of the social and economic fabric of Ireland. In 2015, we successfully completed the first year of a new five year direct award contract with the NTA, and began a number of projects under that contract which will bring enhanced customer service standards and technology improvements to the business. We secured funding for 116 new vehicles, which we launched last week. These will bring higher capacity and comfort to our customers. Our network improvements and marketing helped to deliver 700,000 extra passenger journeys, and we increased our focus on the customer, setting up a new customer care facility, beginning work on Colbert station in Limerick and reinforcing our commitment to safety above all, through a new school transport campaign aimed at raising seat belt awareness among young children.

All of these initiatives underpin our ambition to be recognised as progressive and deliver on our mission, which is to succeed by providing an excellent service to the public.

Bus Éireann’s Expressway network is a separate commercial service that receives no State funding. Our fleet livery is familiar, as one sees the big red coaches traversing the country. The Expressway network comprises 23 inter-regional routes which operate throughout the country, linking cities and population hubs, and must generate its own funds for necessary investment in fleet, customer service, technology improvements and marketing.

The environment in which we operate these Expressway services has become increasingly competitive, comprising a significant number of other coach companies. In addition, customers from bigger population centres demand faster journey times with fewer stops, more use of the motorway network and more direct connections to larger population centres. We have seen new licences granted for routes, and this issue is a matter of utmost concern for our board and management. The NTA now performs a difficult role with regard to licence issuing and connectivity of the network. We assist it when necessary, when routes are being designed or realigned, but ultimate responsibility for ensuring connectivity among all of the public transport alternatives now rests with the NTA, and not with Bus Éireann, since our legal roles changed in 2009.

As Bus Éireann operates more than 300 city and stage carriage routes under public contract with the NTA, we connect thousands of locations and customers on a daily basis, ensuring city and rural stage carriage services are dovetailed with Expressway and other public transport services where it is possible to do so, providing a vast integrated bus and coach network throughout Ireland.

Having addressed the committee last March, we worked closely with the NTA and a solution was provided for the towns affected by our commercial decision to withdraw from Expressway route 5, from Waterford to Dublin through Wicklow, and to curtail our Expressway route 7, originally from Dublin to Cork through Clonmel. The network solution involved a redesign of our public service routes 132 in Wicklow and 245 between Cork and Mitchelstown, both of which are operated under subsidy as part of our public service contract. These routes, together with some integrated connections provided by Local Link, which is the rural transport scheme contracted by the NTA and provided under subsidy, perform a role to ensure the people in these communities remain connected. In this example, the transition from the non-commercial segments of Expressway to public service obligation, PSO, services, has been successful and the subsidisation required is now more prudently aligned with the customer demand in these smaller towns and villages, and not left to our Expressway business to shoulder.

Expressway cannot afford to endlessly provide service on routes which will never deliver a financial contribution and this is a fundamental tenet of being commercial on our inter-regional and intercity services. As part of this decision-making ethos in recent years, difficult decisions were necessary and our Expressway services were withdrawn from approximately 20% of secondary locations where customer demand did not exist or did not cover the costs of providing the Expressway service. That said, through working with the NTA we assure the committee there has been no widespread loss of services to rural locations as a result of the decisions we have made. Bus Éireann is very much committed as a company to rural Ireland, and stands ready to provide the most relevant services for ongoing connectivity across our network.

We previously advised the committee that Bus Éireann has been in survival mode in recent years. The company worked its way out of the recession and remains committed to work with its stakeholders to deliver the best possible transport system, in an efficient and effective manner given the funds available. The pace of economic recovery requires increased public transport levels, and this will require support to foster social and economic inclusion. With regard to PSO services provided under contract to the NTA, we are pleased there is recognition emerging that the PSO subvention to operate the levels of PSO service requires more funding. In 2015, we made substantial progress on developing our services in conjunction with the NTA, and we have seen substantial growth in passenger numbers in the markets we provide. We recently received an additional allocation for 2015, which covered the cost of the services. We have been advised that the level of funding in 2016 will match our costs and we await final confirmation on the capital side. We will submit our own application for the 10% of our services being tendered as part of the PSO market opening later this year.

I shared our concerns regarding the impact of the motorways on smaller towns and villages during our visits to this forum in 2008, 2009, 2012 and 2015. I also advised that changes to a number of our commercial Expressway intercity routes were required to ensure their survival. Nothing has changed in this regard, and, in fact, competition on Expressway routes has increased.

With competition increasing, we must continue to ensure the Expressway service is as cost efficient as possible. The reversal of the 18-month cost-saving agreement with our staff came to an end in 2014 and, taken together with the work stoppage in May of last year, this affected the bottom line and had a very serious impact on our profitability last year. Expressway broke even in 2014. Despite savings achieved through various changes, we will be in loss in 2015, which adds financial pressure to our concern.

The board and the management team are committed to examining ways in which to reduce costs to deliver the profitability necessary to secure a viable future for Expressway. This business requires investment in customer service, fleet, marketing and innovation, and we must create an efficient and cost-effective business model to achieve this. The matter was discussed at the recent Bus Éireann board meeting and the management team has been tasked with bringing a comprehensive strategic plan for Expressway to the board as quickly as possible and to keep the board appraised of progress. As a company, if we do not make changes and consequently lose the flexibility to respond to the licensing environment which continues to unfold, Expressway will go out of business and jobs will be lost.

I reiterate that Bus Éireann is very much committed as a company to rural Ireland and stands ready to provide the most relevant services for ongoing connectivity across our network given the financial resources available. Expressway is part of the wider national integrated network but it still operates in a small economy with a high rural constituency. Our focus as a management team is on preserving and growing Expressway which delivers a significant social dividend to the State through the provision of services not otherwise provided to many regional locations. We will continue to work in a collaborative and inclusive way with our employees to ensure Expressway is put on a sustainable footing but we must also act to protect the future interests of all stakeholders in this business in a market which has become increasingly competitive.