Noel Dempsey (Meath West, Fianna Fail)

I propose to answer Questions Nos. 78, 86 and 119 together.

I have been briefed on the deterioration in Bus Éireann's financial position due to declining demand, revenue and increased costs, and on the measures necessary to maintain its financial viability. In recent years, Bus Éireann significantly expanded its network of services across the country. However, the economic downturn has seen a marked drop in demand for public transport.

This has resulted in Bus Éireann customer numbers falling by over 10% in 2009, which has impacted negatively on the company's revenues. It means it can no longer afford to operate the same high level of services as it has previously. In response to falling passenger numbers and revenue, Bus Éireann is implementing a wide-ranging cost recovery plan to ensure the financial viability of the company and the maintenance of services to the maximum extent possible.

The cost recovery plan involves cost reduction and efficiency measures, a wage freeze, changes to work practices and to the terms and conditions of employment, a reduction in staff numbers of approximately 250 and changes to services. Overall, Bus Éireann is seeking savings of €12 million in 2010.

It is a matter for Bus Éireann, with the agreement of the National Transport Authority in the case of subvented services, to decide on service levels and changes to services taking account of customer volumes and needs, fare revenue and the funding available for public service obligation services. Bus Éireann is seeking to keep as much of its integrated network of services as possible and to minimise the impact on customers, including its most vulnerable customers, by targeting reductions in frequency of services rather than service withdrawal.

Bus Éireann's cost recovery plan is urgently required so the company can avoid a projected operating deficit in 2010 of up to €27 million. The cost recovery plan being implemented is in line with the recommendation of the Deloitte report on the cost and efficiency review of Dublin Bus and Bus Éireann. The report acknowledged, in the case of Bus Éireann, that its network design and schedules are efficient and that some service reductions would be required to return the company to financial stability.

Bus Éireann is strongly supported by the Government. The 2010 public service obligation provision for Bus Éireann is approximately €45 million which the company will receive through the National Transport Authority. This provision is an increase of 185% on its 2000 allocation.

Investment in public transport in 2011 and beyond will be decided in the Estimates and budgetary processes, taking account of the review of capital expenditure being finalised by the Department of Finance. However, in the current difficult economic climate Bus Éireann, and the other CIÉ companies, have to take measures to deliver their services more cost effectively and to ensure their continued financial viability. These measures combined with investment in public transport infrastructure and services will provide a basis for a high quality and economically sustainable public transport system envisaged in the smarter travel action plan.

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