Oireachtas Joint and Select Committees
Tuesday, 5 April 2022
Joint Oireachtas Committee on Transport, Tourism and Sport
Bus Éireann and Bus Átha Cliath: Chairpersons Designate
Kieran O'Donnell (Limerick City, Fine Gael)
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The purpose of the meeting today is to engage with the chairpersons designate of Bus Éireann and Bus Átha Cliath on the strategic priorities they have for their respective roles. On behalf of the committee, I welcome Ms Miriam Hughes, chairperson designate of Bus Éireann, who is appearing remotely. She is very welcome and I thank her for her forbearance. We are having difficulties with the connection to Mr. Gary Owens, chairperson designate of Bus Átha Cliath. We hope he will be able to join us at some stage during the meeting.
All witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against a person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction. For witnesses attending remotely from outside the Leinster House campus, there are some limitations to parliamentary privilege and, as such, they may not benefit from the same level of immunity from legal proceedings as a witness who is physically present does. Witnesses participating in this committee session from a jurisdiction outside the State are advised that they should be mindful of domestic law and how it may apply to the evidence they give.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts of Leinster House will be asked to leave the meeting. In this regard, I would ask any member participating via MS Teams prior to making his or her contribution to the meeting to confirm that he or she is on the grounds of the Leinster House campus.
Members and all those in attendance in the committee room are asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19.
I now call Ms Hughes to make her opening statement.
Ms Miriam Hughes:
I thank the committee members for their time and attention today. I have been asked by the Minister for Transport, Deputy Eamon Ryan, to accept this position and it is my privilege to attend the committee as chairperson designate of Bus Éireann. I look forward to sharing perspectives with the committee on how we can continue to grow and widen access to public transport for all in Ireland.
I will begin by telling the committee a little about myself. I was appointed to the board of Bus Éireann in 2019. Since I joined I have, in addition to my normal duties, served as a member of the audit and risk committee, been chair of the safety and accessibility committee and been a member of the sustainability committee and the overall strategy committee. Prior to this, I was CEO of DDFH&B, which is Ireland's largest communications group. Over 17 years, I led this business through significant growth and transformation and radical business changes. Until recently I was chair of Barnardos Ireland. I am a mentor on the Enterprise Ireland panel. I am a non-executive director of Eir and a non-executive director at Pluto, which is a creative agency. I am a graduate of UCD with a B.Comm and an MBS in marketing. I have served as president of the Marketing Institute of Ireland. I was a member of the Dublin Chamber council and the Irish Management Institute council, and I was chair of the Association of Advertisers in Ireland. These experiences have all been very beneficial. They provide me with a strong background to build on Bus Éireann’s great heritage and work to make it more progressive and customer-focused, delivering real value for the State.
Members are all very familiar with Bus Éireann but for completeness I will provide a brief overview of the company. Bus Éireann was established in 1987 as Ireland's national bus company. The company operates city services for Cork, Galway, Limerick and Waterford, town services for Athlone, Balbriggan, Drogheda, Dundalk, Navan and Sligo, and rural and regional services. These are all under contract with the National Transport Authority, NTA. Despite changes in commuting and travel patterns arising from Covid-19, with the numbers badly affected, we anticipate future growth given the NTA's transformative strategies, including Connecting Ireland and BusConnects in Cork, with Galway, Limerick and Waterford to follow.
It is encouraging to note that many of our PSO services in regional cities and towns have already recovered. We are probably up to approximately 80% of pre-pandemic passenger numbers. Overall, I am optimistic about passenger growth. Bus Éireann will have to compete for many of its contracts but fundamentally I believe these plans will radically improve public transport provision throughout the country and can be achieved within a comparatively short and cost-effective implementation phase.
Bus Éireann also runs a commercial business, Expressway, on 14 intercity and interregional routes. Notwithstanding the collapse in passenger numbers that occurred during the pandemic, and in recognition of its essential service for essential workers who in the main had no alternative form of transport, we continued to operate Expressway routes throughout the Covid-19 pandemic.
This commitment by the board significantly impacted the reserves of the company, but following approval of a new plan, we are now implementing actions to ensure these 14 routes are sustainable. Our focus now is on rebuilding this business and increasing customer confidence. Major markets, such as third level education and airport travel, diminished significantly over the past two years, but thanks to Government support for commercial operators, granted through the National Transport Authority, NTA, Expressway has survived and customers are returning. We have probably reached about 75% of pre-pandemic levels.
Last, but by no means least, Bus Éireann operates the school transport scheme on behalf of the Department of Education, a commitment dating to the scheme's inception in 1967. This is the largest school transport scheme in Europe, with 122,000 children being brought to and from school every day. Many members will be acutely aware of just how vital this service is, especially in rural Ireland, and of the important role it plays in reducing car journeys, congestion and facilitating workforce participation for parents. The school transport scheme is just as relevant to society today as it was in 1967, though for different reasons. We look forward to contributing positively to the Department of Education's review of the scheme currently under way and to bringing this scheme to many others.
What does all this mean? Putting all the elements together, Bus Éireann operates the most extensive and varied public transport network in the country. In 2019, we facilitated 89 million passenger journeys. We covered 82 million km directly and subcontracted a further 110 million km, and these journeys were delivered by our 2,700 valued employees. It is appropriate to take a moment to commend especially our customer-facing staff for the commitment they displayed throughout the Covid-19 pandemic in maintaining the availability of transport to so many. This is a great responsibility. Bus Éireann has set itself the goal of being the most customer-focused and sustainable public transport company in Ireland. Real transformation is under way in every part of this company, as well as a modal shift in how we provide transport for Ireland.
There could not be a more exciting time to be in public transport. Positive change is coming on many fronts, and public transport offers solutions to some of Ireland's most urgent and critical priorities. These include the climate action plan and Ireland’s international obligations to reduce greenhouse gas emissions; the national development plan objectives, including compact growth, enhanced regional accessibility, strengthened rural economies and communities, sustainable mobility, the transition to a low carbon, climate resilient society and access to quality childcare, education and healthcare; improving air quality in cities and towns; and, not least, improving well-being and quality of life for people throughout Ireland.
Technological innovation is a major agenda for us. This will see us move from a fleet of vehicles with diesel-fuelled internal combustion engines to a fleet of zero and low emission vehicles powered by electric, hydrogen and hybrid engines. This will require new training for 300 craftworkers and a major reconfiguration at our depots, as well as more sophisticated management information systems. Bus Éireann is also working in a focused way to make up for years of underinvestment in information technology. A large-scale new booking system has been rolled out on Expressway routes, major transformation projects, funded by the NTA, are under way, and we see enormous opportunities flowing from the introduction of new ticketing technology to our vehicles, particularly in the context of the school transport scheme.
There are always challenges to be faced. As a bus operator, our vehicles must share the roads safely with other users, including cyclists, pedestrians, scooter users and private cars. Congestion is a major challenge for us operationally, especially the lack of enforcement of laws to prevent people parking at bus stops. Additionally, there are only 30 km of bus lanes outside Dublin. Attitudes and behaviours must shift to enable buses to offer ultra-reliable, frequent and punctual services. This, in turn, will help people to choose to use the bus in preference to their cars. Fuel prices are a concern as well, bringing greater impetus to our transition to a zero and low emission fleet. While Bus Éireann was fortunate to have hedging in place for part of our fleet, we are extremely conscious of the impact of higher fuel prices on the general economy. Cost-of-living pressures are a major challenge. We also hope, however, to bring a focus in this context to public transport as being a practical, reliable and genuine alternative to owning a car, especially in regional cities and towns.
As chairperson of Bus Éireann, I will mainly focus on three things. The first is achieving financial stability and ensuring the company can plan for and invest in the future. To a great extent, Bus Éireann is a purpose-led organisation, but providing best-in-class customer experience, safety and sustainability requires continual investment and a longer time horizon to allow resource planning and investment in our fleet and facilities. Second, we will support the NTA's ambitious plans for BusConnects in the cities of Cork, Galway, Limerick and Waterford, as well as in transforming rural public transport through the Connecting Ireland Rural Mobility Plan. These are step changes in the delivery of public transport, and Bus Éireann will be ready with the people, technology and systems to bring them into operation as smoothly and quickly as possible. Finally, we commit to delivering on Bus Éireann’s 2030 sustainability goals. These are broad, including climate action, a continuing focus on being a great place to work, having a strong customer focus, improving diversity and inclusion and increasing the accessibility of our services to people with disabilities, as well as, of course, developing the organisation and maintaining our corporate governance standards.
I am honoured to have been chosen for this role. Public transport matters more than ever. Bus Éireann’s services, and our people who deliver them, can make an enormous impact on communities throughout the country. I look forward to working with all our stakeholders to deliver high standards of excellence throughout our business and to expand our network to meet our future needs.
Kieran O'Donnell (Limerick City, Fine Gael)
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I thank Ms Hughes for her opening statement. I have a few questions. Regarding the Expressway service, is Bus Éireann committing to continue operating these 14 routes?
Ms Miriam Hughes:
We certainly have a plan to get all 14 routes back to full viability. There are different stages of development in this context. We have reached about 75% of potential capacity now and we are constantly reviewing this. Equally, we have received commercial bus operators direct award contract, CBO DAC, support from the Government until the end of June. All these routes have been constantly appraised. Our intention, though, is to get all those routes back to full viability.
Kieran O'Donnell (Limerick City, Fine Gael)
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What does the company have until the end of June?
Kieran O'Donnell (Limerick City, Fine Gael)
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Does that-----
Kieran O'Donnell (Limerick City, Fine Gael)
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How long is that funding in place for?
Kieran O'Donnell (Limerick City, Fine Gael)
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What percentage of passenger numbers makes the routes viable? I refer to overall capacity levels.
Ms Miriam Hughes:
The original costings were based on 100% of pre-pandemic passenger numbers. The commercial viability of all these routes was estimated on that basis. The support from the Government is very welcome because we are now operating at only 75% of those estimates. It is allowing us to continue on this basis, but we are reassessing this situation continually. We also have a new three-year plan, but that relies on passenger numbers recovering.
Kieran O'Donnell (Limerick City, Fine Gael)
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In the context of that recovery of passenger numbers, what level of capacity is Ms Hughes referring to? Is it 80% or 90%?
Kieran O'Donnell (Limerick City, Fine Gael)
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The levels now are at about 75% of those 2019 figures.
Kieran O'Donnell (Limerick City, Fine Gael)
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Will Ms Hughes comment on the ability to survive beyond June 2022 in this context without the CBO DAC funding?
Kieran O'Donnell (Limerick City, Fine Gael)
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And what would happen without that Covid-specific funding?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is the Department of Transport aware of this?
Kieran O'Donnell (Limerick City, Fine Gael)
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If Ms Hughes was to express a view, how long would the funding be needed? I am assuming that Bus Éireann is looking at funding on a scale basis. Has the funding been scaled back up to the end of June or is it at the full rate?
Ms Miriam Hughes:
It is at the full level. It has been recognised that the numbers are still working their way back up. Ideally, to the end of this year at least. Obviously, things such as third level education have not come back to full capacity and nor have airports. Those would have been two big contributors to passenger numbers. Were the new discount introduced by the Government for those under 24 years and the general PSO cut to 20% to be applied across Expressway routes that would help lift customer demand.
Kieran O'Donnell (Limerick City, Fine Gael)
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So there is no PSO on Expressway routes now?
Kieran O'Donnell (Limerick City, Fine Gael)
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I accept that, but that is a specific Covid-related fund.
Kieran O'Donnell (Limerick City, Fine Gael)
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The question I am asking is about if the funding was not extended beyond the end of June. How much does Bus Éireann receive in CBO DAC funding, which I call Covid-related funding, at the moment?
Kieran O'Donnell (Limerick City, Fine Gael)
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What element of that was Covid-related?
Kieran O'Donnell (Limerick City, Fine Gael)
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In 2021, Bus Éireann received €94 million in total in Covid-related funding.
Kieran O'Donnell (Limerick City, Fine Gael)
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And pro rata, Bus Éireann will be receiving the same level of funding up to the end of June.
Kieran O'Donnell (Limerick City, Fine Gael)
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They are separate. I am asking whether the €94 million in funding will, pro rata, continue at the same level until June.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does Ms Hughes believe Bus Éireann needs the same level of funding until the end of the year or is it funding that could be scaled back? If the funding is not forthcoming, what will be the implications for Bus Éireann's services?
Ms Miriam Hughes:
It really depends on the recovery in passenger numbers. We are closely linking with the Department on it. Currently, we are at 75% but we would have been back at 50% at one stage. There is some recovery evident. We are at 80% on some of the PSO services, or between 80% and 85%. So we are encouraged that numbers are coming back. With travel over the summer and, ideally, universities coming back into play, we would like to think that there will be a greater recovery in passenger numbers. We are working very closely with the Department of Transport on the matter and linking in with it every month in respect of numbers. I would like to think that will be a continued engagement. It is likely that we would seek further support, certainly into September-October.
Kieran O'Donnell (Limerick City, Fine Gael)
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Has Bus Éireann already sought that funding from the Department and the NTA?
Kieran O'Donnell (Limerick City, Fine Gael)
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Ms Hughes spoke about financial stability. How did Bus Éireann do last year in terms of its revenue? I assume it was loss-making.
Kieran O'Donnell (Limerick City, Fine Gael)
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What level of loss?
Kieran O'Donnell (Limerick City, Fine Gael)
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I asked Ms Hughes what was Bus Éireann's loss in 2021?
Kieran O'Donnell (Limerick City, Fine Gael)
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That is for 2021.
Kieran O'Donnell (Limerick City, Fine Gael)
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Bus Éireann lost €7.5 million in 2020 and €2.5 million in 2021.
Kieran O'Donnell (Limerick City, Fine Gael)
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What would have been the loss in 2019?
Kieran O'Donnell (Limerick City, Fine Gael)
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Of how much?
Kieran O'Donnell (Limerick City, Fine Gael)
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So if I am correct, there was a €3 million profit in 2019, a €7.5 million loss in 2020 and then a €3 million loss in 2021. However, that 2021 figure is with subvention. That service was operating at roughly 50% capacity.
Kieran O'Donnell (Limerick City, Fine Gael)
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On the Government Covid subvention, CBO DAC. What do those initials stand for?
Kieran O'Donnell (Limerick City, Fine Gael)
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We will call it Covid-related funding. What if that is not forthcoming? €94 million is a big hole to fill.
Kieran O'Donnell (Limerick City, Fine Gael)
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When does Ms Hughes expect to get 100% back on the Expressway routes?
Kieran O'Donnell (Limerick City, Fine Gael)
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Therefore Bus Éireann is looking for subvention up to the end of this year, at a minimum.
Kieran O'Donnell (Limerick City, Fine Gael)
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In the order of the €94 million as was provided for last year.
Kieran O'Donnell (Limerick City, Fine Gael)
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Okay. That is fine. My next question is on fuel costs. I was taken that Bus Éireann was fortunate that it had some hedging for fuel as part of the CIÉ Group.
Kieran O'Donnell (Limerick City, Fine Gael)
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Until when is Bus Éireann hedged?
Kieran O'Donnell (Limerick City, Fine Gael)
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From when does the 18 months run?
Kieran O'Donnell (Limerick City, Fine Gael)
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Is it fair to say that Bus Éireann is capped until June 2023 for 90% of its fuel costs?
Kieran O'Donnell (Limerick City, Fine Gael)
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And that hedging was done in December 2021.
Kieran O'Donnell (Limerick City, Fine Gael)
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One must acknowledge prudent management. That was very good management.
Kieran O'Donnell (Limerick City, Fine Gael)
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Does that enable Bus Éireann to maintain fares at the current rates? Does Ms Hughes see fare increases or that they would be maintained at the current rate?
Ms Miriam Hughes:
It is like the crystal ball. We would like to think that has been extended to us. Our information would say that it is. It is the next period after that which will have to be taken into account. For the short term, it is at least helping us with stability and understanding the sustainable level that we have on finances. It gives us some security. I am very conscious that our school bus drivers, the contractors, do not necessarily have the same certainty behind them with fuel. We have been talking to the Department of Education about that and how we ensure that they remain supported.
Kieran O'Donnell (Limerick City, Fine Gael)
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Is there any way that Bus Éireann would be able to allow some of its hedged fuels to be used on those routes for school transport? There is a situation where Bus Éireann will run some of the routes. There are quite a lot of school bus services out of Limerick. The staff are excellent. We deal with them virtually daily. They are always trying to be accommodating. There might be a school bus that is driven by a Bus Éireann driver and yet a private bus could be running side-by-side covering neighbouring routes and one is much more exposed to fuel costs than the other. Is Bus Éireann is looking at some way to, say, share fuel supplies for that period?
Ms Miriam Hughes:
We are conscious of all of those drivers and the Chair is right that they make a great contribution to that service. We are in constant negotiation and conversation with the Department of Education because we run that service on its behalf. We are working closely with the Department to try to see what support, if any, is possible. That is an ongoing conversation and as we get into the return of the school year it will become heightened for those contracted drivers.
Kieran O'Donnell (Limerick City, Fine Gael)
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Those drivers came before us recently. Guests from the Irish Coach Drivers Association were witnesses to the committee. They are struggling badly with school bus runs and they were looking at particular measures that could be brought in. It is something we are following up on with the Minister. Is there active engagement between Bus Éireann, the bus drivers and the Department?
Ms Miriam Hughes:
Yes. There is active engagement. Some 90% of these routes are run by contractors and they are important to the delivery of the service so we take it seriously. The Department of Education has a lot of sympathy and it is conscious of this impact. It is an ongoing conversation and one we are actively engaged in.
Kieran O'Donnell (Limerick City, Fine Gael)
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I would have thought there is something in the fact that CIÉ has been so prudent that it has a contract for school transport. I know Bus Éireann is administering it apart from the Department of Education. Maybe it is something Bus Éireann could look into. One aspect would be to see if some benefit from hedging could be given to the private school bus operators and more particularly that some mechanism could be put in place with the Department of Education to compensate in some way for the increases in fuel costs, which are quite extreme as Ms Hughes will appreciate. Are the fuel prices hedged at a pretty good rate?
Ms Miriam Hughes:
It is more to do with the fact that this hedged fuel is in our depots and a lot of the school buses are based remotely. Not all have the opportunity to come into the depots but it is a good point and one we would actively engage with again to see what the potential of it is. It is also based around the fact that the fuel is delivered through our depots.
Kieran O'Donnell (Limerick City, Fine Gael)
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I ask Ms Hughes to repeat that last point.
Kieran O'Donnell (Limerick City, Fine Gael)
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I appreciate that but I suspect that they are all near enough. It is a mechanism that should be looked at.
Kieran O'Donnell (Limerick City, Fine Gael)
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We have been having difficulties with our connections but I will try to get Deputy Carey or Senator Dooley in.
Kieran O'Donnell (Limerick City, Fine Gael)
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Is Mr. Owens there? We cannot get through to him. In the circumstances we will conclude. Ms Hughes has given a good account. We might follow up with her on queries that members may have.
Kieran O'Donnell (Limerick City, Fine Gael)
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Great. I thank the witnesses, particularly Ms Hughes, for attending and for the engagement with the committee. We will follow up and write to the Minister to confirm that Ms Hughes has been before us. We wish Ms Hughes well in her formal application.