Tommy Broughan (Dublin North East, Labour)

On behalf of the Labour Party, I welcome the Public Transport Regulation Bill 2009, which is a critical piece of transport legislation for which this House has been waiting for many years. Clearly, reform of the Department's chaotic and opaque system of bus licensing has been desperately long overdue. Labour's key aim in this regard is the development of a comprehensive, responsive and accessible bus system which is commuter-focused and has the highest possible health, safety and working conditions for all passengers and staff. The taxi industry has seen a shocking deterioration of standards and conditions and I, therefore, also welcome the Bill's provision to subsume the Commission for Taxi Regulator into the new Dublin Transport Authority.

Labour has long called for a national system for regulating public transport. However, we envisaged a Dublin Transport Authority and a National Transport Authority working side by side, since transport challenges in a large urban region such as the greater Dublin area and the much more rural rest of Ireland are quite different. Despite our antipathy to the multiplication of quangos, this may be a clear case where one size does not fit all. Labour has profound concerns about how the new National Transport Authority will be structured and how the regulation of public and bus transport in the critical greater Dublin area will evolve given the proposed absorption of the DTA into the NTA.

Serious consideration must be also given to the Minister's stated decision to amalgamate the Commission for Aviation Regulation and the regulatory functions of the Irish Aviation Authority into the National Transport Authority. I could also envisage a rationalisation of these two agencies into one aviation regulator, but since aviation and land transport are also different, I have strong reservations about the proposed merger and the manner in which the Minister is handling the matter in the Oireachtas.

I also regret that this just published legislation must be rushed through the Dáil by 3 December to give full legislative effect to EC Directive 1370/2007 at the same time as the establishment of public transport service contracts for the protection of key public bus, rail and light rail services. This is a direct result of the appalling dereliction of duty by the Minister, Deputy Dempsey, and his three predecessors since 1997.

The primary objective of this public transport Bill, as outlined in Part 2, is to overhaul how bus passenger services are licensed and regulated across the State. The lethargy the Minister has shown on reforming the disgracefully inadequate and chaotic regulatory system for bus services is deplorable given that the current legal framework is 77 years old.

The valuable briefing provided for us by the Oireachtas Library and Research Service - I thank this service and the Department - highlights the amazing survival of this antiquated system of laws, including the key 1932 Road Transport Act for licensing private road passenger services, and of course the Acts of 1944, 1950 and 1958. The types, level, standards and frequency of transport services on offer bear little, if any, resemblance to that era, and yet we still rely completely on the antique, cumbersome 1932 law to regulate and organise our public transport services.

As the Department's screening regulatory impact analysis of the Bill notes, the basis for approving an application under the 1932 Act is a proof of demand test which is "undefined and the grounds for refusal circumscribed." However, the screening regulatory impact analysis was thorough and I agree with its conclusion which is why I support the Bill. There are numerous examples of Dublin Bus, Bus Éireann and private operators who have wanted to run new services but who are left hanging on interminably for any kind of response from the Department.

For example, the proposed Dublin Bus 41X service for the massively expanding Swords area through the Dublin Port tunnel was stymied endlessly by the Minister's interpretation of the 1932 Act. Recently, Bus Éireann applied to the Department to provide extra bus services to commuters via the Port tunnel to Balbriggan after the Broadmeadow Bridge collapse and in that case there was endless filibustering of that request.

There also have been an astonishing number of cases of bus services being run where the licences have been disputed by the Department. At present, the Citylink direct service between Dublin and Galway, which is run by one of the big four operators from the UK, operates even though the Department of Transport has publicly indicated that the company does not have a valid licence. The ludicrous sanctions under the old Act is a fine of a mere €6.35 a day.

EC Regulation No. 1370/2007 was issued on foot of the key transport objectives contained in the 2001 European Commission White Paper, "European transport policy for 2010: time to decide." The directive aims to regulate how competent authorities in each member state can guarantee public transport services especially in the context of publicly funding certain transport services within the market economy.

The regulation also provides stricter standards for the accountability of publicly funded transport services and the establishment of national transport regulators. The key issue here, however, is the need under Regulation No. 1370/2007 for the existence of a contract between the competent authority and the publicly funded transport operator detailing the service that the operator is mandated to provide and the geographical areas that the contract covers.

The 2008 Dublin Transport Authority Act established a new performance-based contractual procedure for public bus services in the greater Dublin area and the Public Transport Regulation Bill will eventually allow for these new contractual procedures to be extended nationwide. I understand from the Minister's Seanad speech that work on drafting the necessary direct award contracts with Bus Éireann, Dublin Bus and Irish Rail for current public transport services is still taking place, and the Minister might comment on that in his reply.

If these contracts are not in place by 3 December the legal basis for thousands of critical public bus and rail services provided by Dublin Bus, Bus Éireann and Irish Rail is completely and disastrously gone. The Minister, Deputy Dempsey, has been driven to distraction with the antics of Deputy Mattie McGrath and the drinks industry lobby in recent months on the recently published Road Traffic Bill, but it is still impossible not to criticise his last minute approach on the Bill before us.

I also hope that the Minister in his reply will provide a full briefing on how the establishment of contracts will affect the allocation of funding for public transport services in the 2010 budget. The Minister will recall that he refused to do so at the Joint Committee on Transport.

In recent years the Fine Gael Party, the defunct Progressive Democrats and some elements in the Minister's party clearly aimed to privatise key transport services no matter how short-sighted or detrimental to the public interest. Dr. Seán Barrett of Trinity College, for example, encapsulated this view a few days ago in an opinion piece in The Irish Times where he criticised the Bill before us for not going much further towards a more extreme deregulation and privatisation agenda, as he and Fine Gael clearly want. Dr. Barrett totally ignores the challenges of providing a top-class bus service to all of our citizens no matter where they live. We must avoid at all costs a deregulated system where operators could cherry-pick the more attractive and profitable routes and leave working class and lower income communities without a proper bus service, or seniors and other vulnerable citizens who rely totally on the bus paying through the nose for such services, and this is the record of many deregulated markets.

International experience has shown that the market alone simply cannot provide a comprehensive and regular public transport system for all its citizens. The challenges of providing decent urban and rural bus services with the disgracefully low level of PSO funding that Dublin Bus and Bus Éireann have historically received is laid out in the Deloitte review of efficiencies in public bus services.

In the case of Bus Éireann, with approximately 1,300 buses and 2,700 staff, the Deloitte consultants described the national carrier as, essentially, a very efficient company. This was even though its PSO contribution was as low as 12%, which was totally ignored by my Fine Gael colleague and which Deloitte concluded as "low" in European terms. At Dublin Bus, with 1,050 buses and 3600 staff, Deloitte highlighted a number of network issues that the company was already reviewing but, again, in general, the report found few, if any, glaring inefficiencies in the company. Even Deputy O'Dowd must know that year after year for the past 13 years Dublin Bus asked for more buses to run new services but it did not get them, which was a political decision by the Ministers formerly responsible, Deputies Brennan, Cullen and O'Rourke.

Deloitte found the Dublin Bus PSO payment "equated to around 29% of total revenue" in 2007, significantly lower than operators in cities like Brussels, Zurich, Amsterdam, Lyon and London, or even the 33% subsidy of the big four private operators in the UK outside of London. We should not forget those operators also get an excise rebate of STG£500 million. Yet, in a privatised system, the government can end up paying significantly higher revenues to get operators to work less attractive and less profitable routes that most private operators simply do not want to touch. This is starkly outlined in the recent report of the UK Office of Fair Trading, OFT, into the private bus sector in the UK, "Local Bus Services: Report on the market study and proposed decision to make a market investigation reference". This report is an important warning for us on how deregulation can provide seriously bad outcomes for consumers, passengers and transport authorities.

The OFT investigation reports that the British Government spent STG£1.2 billion in 2006-07 supporting bus services in the deregulated British bus industry, which totalled almost 33% of the total revenue of bus operators. There was also an excise rebate subsidy, which brings the total subsidy to approximately 38% to 40%. Yet, a Member has complained in this debate about subsidies of less than 30%.

The OFT report makes a number of disturbing findings which it referred to the UK Competition Authority. It found that the UK market, excluding London, which has a different system, and Northern Ireland, which has a system more like ours, was dominated by four large companies - First Group, Stagecoach, Arriva and Go-Ahead - which control two thirds of the UK market. The Acting Chairman, like myself, has probably travelled with some of these companies. These companies concentrate on certain regions of the UK and rarely compete head to head. There were significant barriers to entry and significant exclusionary behaviour to crowd out any new rivals.

The allegation made about CIE in Lucan is heard again and again throughout the UK, where private companies are involved. Average fares were highest where there is only one private operator and there are deplorable practices such "salami-slicing" or "gaming", where parts of routes are abandoned. Deputy O'Dowd talks about privatising routes.

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