Peter Power (Limerick East, Fianna Fail)

I thank Deputies O'Dowd and Broughan for their contributions. I have rarely on Report Stage seen such a large group of amendments on varied issues that have been teased out in committee. The fundamental amendment proposed by Deputy O'Dowd goes to the heart of the legislation and demonstrates the key difference that divides the Fine Gael Party and Government on this matter. The core purpose of the legislation is to protect consumers and customers. It strikes a delicate balance between the rather extreme view articulated by Deputy O'Dowd and the more reasonable view espoused by Deputy Broughan. The legislation steers a course between these views, albeit one that veers towards the model espoused by Deputy Broughan.

I propose to make a number of fundamental points on Deputy O'Dowd's position and set out the consequences of his proposal. As a result of the Fine Gael Party proposals, all bus services, commercial and subvented, would have to be the subject of a tendering process and contract with the new national transport authority, formerly known as the Dublin Transport Authority. The logical conclusion of the Deputy's proposal would be that the authority, rather than the operators and private companies, would have an obligation to identify new commercial bus opportunities, including bus services for once-off events such as concerts and sporting occasions. It would not be open to the private sector to identify such opportunities if a tendering process by a national authority was required for this purpose. For example, if a concert was announced at short notice, it would not be open to the national transport authority to establish an entire tendering process within a very short period. This approach would not be in the interests of streamlining the bus licensing process or improving efficiencies in the delivery of services to the general public.

Deputy O'Dowd seeks to expand the terms of section 48 of the Dublin Transport Authority Act 2008 to cover the operation of all services, both public and private. The section, through which contracts for public transport services are to be made, was prepared on the basis that contracts for bus services would only arise in the case of subvented services that are the subject of a public service obligation, while commercial bus services would be the subject of a bus licensing regime. We believe that there should be both. Competitive tendering for all would not suit Irish circumstances. The Minister considers that this is a reasonable and very appropriate approach, and asks the Deputy to withdraw the amendment.

The abuse of a dominant position was raised by Deputy O'Dowd. We do not want a completely unregulated free-for-all for tendering that will leave whole areas of Dublin or the rest of the country without bus services. That is the inevitable consequence of unregulated tendering. A regulated competitive environment is absolutely vital, be it in public transport or private transport services. Deregulation and lack of regulation in the banking sector serves this point. It is important to have a very competitive banking sector, but the problem started in America ten or 15 years ago, when there was total deregulation. The last person deregulation serves is the consumer. The provider, the bank, the dominant player in the market — these are the ultimate winners from complete deregulation. The essence of the debate here is whether we should have total deregulation or a highly unsustainable regulated model, as espoused by Deputy Broughan. We suggest that this Bill strikes a balance between those two extremes, because it protects the consumer, allows existing State bus operators to operate on routes which would otherwise be unviable. We must protect these routes, but provide for competitive tendering in other areas.

We do not wish to provide complete protection. Section 52 deals with many of the issues raised by Deputy O'Dowd on competitive tendering. It establishes the basis for continued provision through State funding of the existing public bus and rail passenger services that are currently provided by Bus Éireann, Dublin Bus and Irish Rail in the greater Dublin area. It empowers the authority to enter into direct award contracts with Dublin Bus, Bus Éireann and Irish Rail for the provision of existing funded public bus services and rail services in the greater Dublin area. To facilitate the making of the contracts in respect of the public bus services, section 52 establishes that Dublin Bus and Bus Éireann have exclusive rights to continue to operate their current funded services, subject to the grant of bus licences under the 1932 Act and future legislative changes. These arrangements support the continued operation of services in the general public interest.

The key aspect of section 52 is that the authority must enter into direct award contracts with the three companies mentioned for the services in which exclusive rights apply. These initial contracts may only be for five years in the case of a bus service. The contents of these contracts and the basis for maintaining them may be reviewed at any time by the DTA. The future national transport authority will have a key role here in monitoring the contracts to ensure they are serving the public interest, and that there is no abuse of a dominant position. The Minister will have to keep a very close eye on this in the House, through the relevant Oireachtas committees, to see if the national transport authority is really pursuing and vindicating the objectives, aims and principles set out in the Bill.

Section 52 provides that following the expiry of the initial direct award contract, the authority can also enter into subsequent direct award contracts. However, such contracts may only be pursued where the authority is satisfied that the continued adequacy of the public bus passenger services to which contracts relate can only be guaranteed in the general economic interest, by entering into such direct awards. What does that mean? It means there is a statutory framework in place to protect services that would not be protected if the Fine Gael amendment were enshrined in this Act. That allows the authority to cater for that situation. Where the authority reviews a direct award on the grounds to which I referred, it must invite submissions from the holder of the contracts or any other interested parties, including the users of the services. There is provision for services which the Bill seeks to protect. In every country there is state protection of some bus services. We want to allow a situation where that becomes somewhat more flexible in the interests of the consumer, but we also need to protect existing bus services. Section 52 address those competitive tendering issues that were raised by Deputy O'Dowd.

The grouping of amendments means that section 5 to section 28, inclusive, would be deleted from the provisions of this Bill. Deputy Broughan is opposed to those amendments and he made the case against them. It is generally recognised that the Bill provides for a replacement of the 1932 Act, which suited that time but does not suit the market as it pertains at the moment. It applies to the licensing of private bus operators and the relevant provisions of the Transport Act 1958 that relate to the provision of bus services by the State bus companies. The current licensing regime has long been recognised as being outmoded and in need of reform or replacement, so that it can better support the provision of modern bus services that place consumer needs at their core. The new bus licensing regime will apply in respect of all commercial public bus services, including those provided by Bus Éireann and Dublin Bus, and which will provide for a modern set of criteria against which licence applications can be assessed.

The provisions of the Bill establish a mandatory requirement for operators, such as the need to hold a licence, to comply with conditions and allow the new national transportation authority to adapt to the system to meet changing market needs. That is a key aspect of this. As the requirements of the consumer evolve over time and as Dublin in particular changes, the authority is empowered under the sections and the proposals in this Bill to adapt and to adopt a flexible approach. An inflexible and very deregulated approach does not allow for flexibility over time to deal with emerging situations. That is where I would see the real flaw in what Deputy O'Dowd is saying.

Deputy Broughan claimed that the 1932 Act does not work, and while he does not agree completely with all the details of this Bill, it goes some way to dealing with the defects in the 1932 Act. If we were to accept the Fine Gael amendments, it would blow away the centre of the Bill and would effectively allow the 1932 Act to pertain. It is not in anybody's interest that this situation——

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