Mr. Dermot O'Leary:

I wish to thank the members of the committee for receiving our delegation here today. The current situation at Bus Éireann is one which reaches into every home in every community across Ireland. Without Bus Éireann there is no transport network, there is no connectivity in terms of citizens being able to access schools, colleges, the workplace, hospital appointments etc. The National Transport Authority will say, and have said, differently. We will cover that later in our statement.

First things first. Is there going to be mass travel disruption next Monday across the transport network? The answer at this remove must be a qualified, and unfortunate, "Yes". As has already been pointed out, some Bus Éireann depots are shared with Iarnród Éireann.

Even thought we in the trade union group are not in dispute with Iarnród Éireann, and we have advised our members accordingly, there is absolutely no guarantee that Irish Rail staff will attend at work in locations such as Limerick, Tralee, Waterford, Galway, Sligo, etc.

There are many aspects to this crisis. Its creation did not come through the actions of Bus Éireann staff. It is wrong and disingenuous to describe the issue as an industrial relations dispute. The consequences will go far beyond the impact of an old-fashioned trade dispute between employer and employee. While there is an immediate threat to 2,600 jobs, the future of public transport for rural Ireland is equally under threat.

Many statements have been made in the Dáil and through the media to the effect that the problems at Expressway are confined to the advent of a competitive commercial market. While there are issues around competition, they do not tell the full story, nor do they provide a solution to the crisis at Bus Éireann.

Bus Éireann is a company that has three distinct elements, namely, Expressway, the public service obligation, PSO, service and schools. The PSO services are allowed to make what we would say is a reasonable but modest profit by the National Transport Authority, NTA, of approximately €400,000. The schools contract, which is an administrative arrangement with the Department of Education and Skills, covers its costs, and Expressway is the only leg of the company that can, ostensibly at least, chase profit and increase revenue.

What has caused this crisis? The answer is straightforward enough for those of us who work within the industry. It is Government policy. The National Transport Authority, the regulator, has issued licences to commercial operators that have resulted in a saturation of seat capacity across the motorway network. Those licences have been issued without due regard to the existing Expressway services. Consequently, people have migrated from the slower State carrier to the quicker private operator. Bus Éireann services are not slower because of any inefficiencies but because the social aspect of the Expressway service has it calling to towns and villages the length and breadth of Ireland. The private operators cherry-picked the most lucrative segments of the Expressway network and now operate point-to-point for profit without any wider social service obligation.

How can the NTA state that it was cognisant of existing services when issuing licences? Its own guidelines dictate that it will be cognisant of existing services but the reality is manifestly untrue. In recent weeks, the same NTA has been attempting to rebut our contention that it saturated the motorway network by contending that "...we have rejected almost as many applications for licences...as we have granted". In the same press release, a copy of which I have given to the members, it went on to state: "Our primary responsibility in law is to the travelling public, and when we assess an application for a commercial licence, we do so with this in mind, while looking at a whole range of considerations including likely passenger demand, impact on existing services and impact on subsidised services."

That refers to PSO services.

A quick analysis of that portion of the statement gives an alarming insight into the thought process of the NTA. It states that it considered the "likely" passenger demand. The reality, however, is different. The five licences, and it is five, it has issued and the three amendments it has made on the Dublin to Cork, Dublin to Limerick and Dublin to Waterford routes have not met that lopsided likely demand criteria it says it does. In fact, it has increased the seat capacity by double the NTA's own stated passenger numbers for the period 2012 to 2015.

The NTA contention that it looks at the "impact on existing services and impact on subsidised services" is frankly laughable. Why? The following examples of the impact on existing services conflict with the NTA line. On the Dublin to Waterford route, Bus Éireann has ten intermediate stops while the private operator stops only in Carlow. That is because of the location of the college. On the Dublin to Galway route, Bus Éireann has 16 intermediate stops while the private operators have none. On the Dublin to Cork route it has four stops while the private operators have none, and on the Dublin to Limerick route it has four stops while the private operators have none.

Simply put, Bus Éireann cannot compete because the NTA has over saturated the segments of its network that were returning a profit and issued licences to private operators with no social service, unless one happens to live beside a motorway.

Bus Éireann once made a profit. As the table I have circulated to the members demonstrates, Bus Éireann subsidised its public service obligation routes to the tune of over €40 million over a ten year period. That was an integrated transport provider reinvesting profits back into the State. Today, any profits go to shareholders in Hong Kong or London. I say "any profits" because the most recent accounts of one of the main private operators, Dublin Coach, show a loss of €1.6 million, which supports our view that the so-called market is over-saturated.

In media interviews in early January, the NTA stated that if Bus Éireann were to pull a service from rural Ireland then it, the NTA, had a toolkit by which it would quickly move to plug the gap, so to speak. If we examine this wondrous toolkit we see that we have a working, although I question that word, practical example of its magical powers. A number of years ago, Bus Éireann was forced to exit five towns along the Cork route in a futile attempt to compete with the ever-increasing number of private operators. The NTA was forced to issue a tender for replacement services. It is a matter of public record that M&A Coaches won that contract at a cost to the taxpayer of €440,000 per year for a mini-bus service with less frequency to five towns. These services were being provided by Bus Éireann free of charge as part of the integrated network I mentioned earlier.

If those costs were applied to the Dublin to Cork, Dublin to Limerick, Dublin to Waterford, Dublin to Galway and Dublin to Clonmel routes, taking into consideration average kilometres and the number of towns, the approximate cost of providing minimum or basic bus services compared to what currently exists is €88,000 per town. The 38 towns on those routes served by Expressway would cost the taxpayer approximately €3.34 million per year.

In its own recent reports, Bus Éireann estimates that it would cost approximately €5 million per annum to PSO fund towns currently served by routes 4 and the other routes set out in my written submission. That clearly illustrates that there is a role for the Department of Transport, Tourism and Sport and the NTA in resolving this crisis.

The Department of Social Protection should be added to the list of those that can contribute to a resolution. The funding received by Bus Éireann from the Department of Social Protection to carry citizens of this State who have free travel has been frozen since 2009. Bus Éireann's Expressway service provides 7 million journeys annually, 2.4 million, or 33%, of which are Department of Social Protection passes, which are essential for those people who rely on this vital Government intervention.

Anecdotal evidence tells us that several private operators do not facilitate the Department of Social Protection passes. Currently, Bus Éireann gets slightly more that 40% of an average fare, that is, €4.81, for the average fare of €11.78 from the Department of Social Protection.

Interestingly, the recent rail review conducted by the National Transport Authority and Irish Rail recommended an increase of 40% in the moneys Irish Rail currently receives from the Department of Social Protection. I would expect Irish Rail to look for more money, but this is the NTA of which I am very critical in my submission. An Irish Rail passenger profile reflects that 11% of the journeys are Department of Social Protection passes. Such an increase to Bus Éireann would constitute an increase of €4.5 million. That is what it would do to Bus Éireann.

The notion that the State has no role in addressing the problems at Bus Éireann is fundamentally wrong. It is simply not good enough for the Minister to state that he has no responsibility in this regard. Such a stance does not move on this debate one jot. It also tells those living in rural Ireland that their current bus service will at best be replaced by a reduced mini-bus service and is therefore not as important, or as relevant, as those in large urban centres. That is simply not good enough.