Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to contribute on Second Stage of the Public Transport Regulation Bill 2009. The primary purpose of the Bill is to provide a good quality cost-efficient public bus passenger transport service for the people of the country. To effect that vision, the Government believes there is a need to examine the licensing regime that exists and examining it clearly shows a necessity to reform it. The Bill sets out the framework to facilitate regulated competition in the public bus passenger service.

Despite what the previous speaker, Deputy James Bannon, stated, the Bill builds upon knowledge and experience gained from other jurisdictions which sought to liberalise the market. I was taken by the comments he made and by the position put forward by Fine Gael which seems to involve liberalisation or absolute deregulation in the bus market. Other jurisdictions have done that, believing that open competition in a full and open market would lead to better value and perhaps a better service for the consumer. My understanding from the research I have done is that this theory has been proved wrong. The approach taken by the Government will lead to a much better outcome than those achieved elsewhere.

Fine Gael has put forward proposals which seek to mirror the approach taken by the UK. Its experience of deregulation and tendering has generated very negative comments. I received material on a study undertaken by the Office of Fair Trading in the UK. The initial report outlined some worrying trends which undermine much of what Deputy Bannon said about deregulation or open tendering. It sounds good but the experience has not been to the benefit of the consumer.

The material I received seems to indicate that deregulation resulted in reduced or, in some cases, no competition resulting in lower quality services. It was found that in areas with only one operator fares are typically 9% higher. This would be worrying from a consumer's point of view. The term "gaming" was used in the report, and this was identified as a practice where an operator could cut rural or less profitable ends from a commercial route with the expectation that ultimately the UK local authority would have to tender that element of the route to an operator who could then operate it as part of a subsidised route. This means that what was all under a commercial licence initially would end up receiving further financial support from the state at a greater cost to the state.

I understand the initial report of the Office of Fair Trading refers to the Darlington case where a multinational company submitted a bid to buy a local municipal bus company, the Darlington Transport Company. It was unsuccessful in that effort and immediately flooded the market with free buses. The municipal bus company could not compete and went bust within a number of days. The local councils lost out because they had a facility and service with an inherent value of in excess of €1 million. Due to a deregulated environment, the financial resources available to a multinational company were able to put a company out of business. This shows that deregulation does not work. The predatory practices of large multinationals will wipe out any competition in a short period of time and ultimately control the market to suit themselves and make a profit. It requires greater thinking. I am somewhat concerned about elements of the Bill but, by and large, its structure and framework are right and some areas might be tightened up through amendment.

The Office of Fair Trading's study dealt with tendering, which happens outside London. There was a near doubling in the cost to the taxpayer over the past ten years with a cost today of £1 per kilometre. In half of all local areas outside of London, 20% of tenders receive just one bid. This sets out the basis for the information gleaned by the Minister and the Department which shows the importance of retaining to some extent a regulated environment for liberalisation in a regulated way. While the two words might seem somewhat confusing, it is important that we take that approach.

Bus Éireann provides a very good service throughout Ireland and there is a quality to that service. It provides value for money and its cost structures were recognised by Deloitte in its most recent report as being to a very high standard. That was based on independent research. To seem to undermine - as Deputy Bannon did perhaps inadvertently - what Bus Éireann does is wrong and unfair to the people who work in that service. They carry out their work in a very efficient way and that is down to the management of Bus Éireann, particularly people such as Tim Hayes, whom I believe to be an excellent public servant.

At present, there is much criticism of public and civil servants orchestrated by some elements of the media. When one makes an effort through research to understand what is going on in many State and semi-State companies, one meets people of the calibre of Tim Hayes, John Lynch and others on the board of CIE who give it their all; they have the common good of people at heart. These people are often undermined by the unnecessary commentary that goes on in this House in seeking to gain political advantage and outside the House by elements of the media. It is right that we recognise where public servants have put in place a service that has been to the benefit of all and, it is hoped, can be maintained, worked upon and built upon through the passage of this legislation.

The integrated nature of the Bus Éireann network is a vital component of the service provided. It offers a vital link throughout rural and more urbanised areas. The current service is not, and was never intended to be, a rural service. A recent development, whereby the Government put aside funding through the rural transport initiative, is a way of dealing with that. I will address this later if I have an opportunity to do so. It is important that we focus on the integrated nature of the service as it is constructed because it is open to larger multinationals to cherry pick commercial routes. The multinationals will exploit some point-to-point routes and generate as much business on them as they can and seek to generate profits for themselves. The existing service facilitates some PSO or subvented work as a part of or at the tail end of some routes. We need to examine this aspect.

As the Government rolls out the interurban routes, which will connect Cork, Limerick and Galway with Dublin, we must ensure that a service is maintained along what were the old routes. The new services will go point-to-point and carry the greatest number of passengers but it is important that those towns which are bypassed - some of them are quite large - still have an effective transport service. We must be careful in the issuing of licences by the transport authority at a later stage that, in an effort to offer a point-to-point service, we do not undermine the existing service. Deputy Bannon spoke much about Athlone and other places in his constituency. The simple reality is that if we were to deregulate the market, the bulk of people from Galway, Sligo and other locations would take the main routes and there would not be the business to allow a service provider to call to the villages and towns he discussed. What he is asking for would be to the detriment of many of the towns in his constituency. We must be very careful about this and it needs to be taken into account in the issuing of licences.

In an effort to address that, the State would have to provide more money for routes which would start to carry public service obligations after the removal of commercial services along interurban routes. I am aware that a large multinational company has begun to provide an unlicensed service on the Dublin-Galway route in an effort to put an indigenous provider out of business. The financial resources of this multinational allows it to offer €1 fares. Such companies will be able to push the indigenous operators off routes very easily. They have sought to undermine the existing regime because the 1932 Act fails to provide the sanctions required to deal with them. The framework set out in the Bill before us will, however, allow the State to act. I ask the Minister to ensure the issuance of a licence does not impact on the integrated network. The licensing of routes which have a commercial basis alongside PSO components by virtue of the way Bus Éireann has operated in the past should not be done in such a way as to require the State to pick up the cost of the PSO. I ask the Minister to consider strengthening the legislation to protect the network. Perhaps he could consider excluding those who have previously operated in an unlicensed or predatory manner from receiving future licences. I accept this would be difficult to achieve because companies can change names and directors but it is not beyond the Minister and his officials to come up with a method for excluding directors or operators. Some operators, including in particular the multinationals, recognise the landscape is changing and have sought to soften up the marketplace in advance. We need to get tough by ensuring they do not achieve their aims.

As somebody from a rural area, I am cognisant of the difficulties experienced by those who live in isolated areas. In areas with aging populations, there are people who do not have access to private transport or relatives. It is vital, therefore, that the State manages a rural transport service. While the Bill before us does not deal with that issue, I welcome the recent announcement by the Minister that funding will continue to be made available for the rural transport initiative. However, we will have to await the budget for the details of that funding. Although rural transport was identified in the McCarthy report as an area in which cuts could be made, I am delighted that the Government in its wisdom has decided to protect that service.

The Clare accessible transport project, which originated in the part of east Clare from which I come, has developed a great service for people in isolated rural areas. It has already been working on the pilot projects identified by the Minister which bring together the HSE, Bus Éireann and the rural transport initiative to develop a more comprehensive approach to the movement of people in rural areas. We owe the project our gratitude for targeting the most important groups, namely, the elderly, the young and the disabled. An inherent part of its work is ensuring that young and elderly people with disabilities can access bus services.

Rural transport needs to move beyond initiatives and pilot projects and into the mainstream public transport network. The outcome of the pilot projects and other research can facilitate the State in introducing a comprehensive rural transport network which is integrated into national bus and rail routes so that people living in Mountshannon, Killanena, Feakle or Corofin have the same access to transport as those in Athlone or Dundalk. The frequency of service may not be the same but at least people would have access to the outside world. Rural transport services would also contribute to decreasing carbon emissions by reducing the necessity for cars.

Rural transport becomes even more critical in the context of the Government's plans to reduce the blood-alcohol limit as part of its road safety agenda. While there are differing views on these plans, the Government intends to progress them. A proper bus network will be necessary if people who live in rural Ireland are to have the same social opportunities as those who live in larger towns and cities. To that end, I hope the rural transport initiative is put on a legislative footing.

I ask that further consideration be given to the issues I have raised. Strengthening the conditions on which licences are issued can protect the PSO components of the network from practices which could otherwise lead to the deterioration of services or require greater investment by the State. I also ask that the legislation be strengthened in respect of operators. I suggest that we investigate whether licence applicants have criminal records, particularly in regard to drug or child offences.

It is necessary that the financial stability and integrated network of the direct award contract of Bus Éireann's PSO services should be considered when granting all categories of licences. Licences should not be issued if they cut across PSO services. Otherwise, the State will bear the costs of supporting the services in question or will be forced to close them and, possibly, reinstate them at further cost to the State at a later date.

Those who have sought to undermine the current licensing regime should be dealt with appropriately and effectively. While this is not possible under current legislation, they could be dealt with when they seek a licence under the new regime. Their past practices should come back to haunt them because they have inflicted damage on the bus network.

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