Dáil debates
Thursday, 2 April 2009
Other Questions
Public Transport.
4:00 pm
Damien English (Meath West, Fine Gael)
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Question 6: To ask the Minister for Transport if he has strategies to make CIE financially more self sufficient; his plans to reduce subvention to CIE; the amount of public money given in both capital and PSO, public service obligation, payments to CIE since 1997; and if he will make a statement on the matter. [13792/09]
Noel Dempsey (Meath West, Fianna Fail)
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CIE derives the bulk of its revenue from fare income. The Exchequer subvention to CIE in respect of its public service obligation amounted to 27% of its operating costs in 2007 compared with 22% in 1997. This growth in the proportion of costs accounted for by the Exchequer subvention reflects increased Government support for the provision of more and better public transport services and the increased costs of such services. I expect that CIE and its subsidiaries will, in addition to a high level of Exchequer support, have to rely increasingly on increased fare revenue, cost reductions and efficiencies to ensure their financial stability.
During the period 1997 to 2008, a total of €2.7 billion in Exchequer funding was paid to CIE in respect of compensation for its public service obligations. In the same period a total of €2.9 billion was paid in capital grants mainly in respect of rail development works. The bulk of the current subvention for services relates to rail services, with €191 million or 62% of the total subvention allocated to rail in 2008.
The recently published Deloitte cost and efficiency review reported that the levels of operational subvention of Dublin Bus and Bus Éireann are lower than in other EU member states. The annual subvention paid to CIE in respect of its PSO services has grown from €133 million in 1997 to €313 million in 2009, an increase of 135%. Decisions in respect of the level of funding in the years ahead will be made as part of the budgetary process and, in the case of Dublin Bus and Bus Éireann, taking account of the implementation of the recommendations of the cost and efficiency review. The Government will be seeking to maintain investment in the development and operation of public transport services at as high a level as possible to promote public transport use.
Fergus O'Dowd (Louth, Fine Gael)
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There have been significant improvements, especially in Iarnród Éireann and the infrastructure. I welcome such proposals as the underground DART plans and new signalling on the Malahide route inward, which will increase capacity from 12 to 20 trains per hour and make a substantial difference to the throughput. However, the Minister stated that since 1997 the allocation has increased from €133 million to €330 million. I realise much of that allocation is capital, but Government proposals to increase competition, especially bus competition, have not come to fruition to date. Part of the problem, enunciated by my colleague, Deputy Broughan, today, is that dozens of Dublin Bus routes are being cut and some 120 buses will be put in mothballs. This is a result of the policy of the Government not to introduce competition to bus routes, although that was promised ten years ago. Such a move would help to reduce the taxation subsidy to CIE.
Noel Dempsey (Meath West, Fianna Fail)
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I do not accept that there is logic in the Deputy's argument in respect of the introduction of competition. There in competition in the bus market. Anyone can apply for a licence for any route. There are specific issues and considerations related to the issuing of a licence, but anyone may compete. Also, with the new directive in place from December of this year, there must be open competition for any new PSO routes. I do not understand the Deputy's logic of introducing more competition in the Dublin market to save money on the PSO. PSO routes are those on which a subsidy will be required irrespective of whether there is competition. The reason for PSOs is that the relevant routes are not commercially viable.
Tommy Broughan (Dublin North East, Labour)
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I agree with the Minister in that PSOs will be necessary for a range of routes. In his first answer on this issue, he confirmed that the public subsidies for Dublin Bus and Bus Éireann were among the smallest in Europe. The latter's 12% subsidy could be contrasted with, for example, two or three companies in the Netherlands that receive subsidies of 50% or 51%. TEC in Wallonia receives a 51% subsidy. Ongoing support for public transport is necessary. Does the Minister accept that it is a public good?
Does the Minister regularly approve business plans for Dublin Bus and Bus Éireann? Was he aware of their significant service expansions, that they were taking on more drivers and so on? Many young drivers who are family men and women have complained to me that the Minister encouraged the companies to employ staff. The new staff, particularly employees with less than one year's service, were caught when he reversed gear due to the lower passenger numbers, which owes to the recession, the Cowen depression or whatever we want to call it. Was the Minister not aware of what was occurring in recent years in both companies? Knowing is one of his statutory duties.
Noel Dempsey (Meath West, Fianna Fail)
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Over the past number of years, my predecessors and I have increased the subsidy substantially. It is not my business to get passengers for Bus Átha Cliath or Bus Éireann. That is a matter for the companies.
Tommy Broughan (Dublin North East, Labour)
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The Minister regulates the fares.
Noel Dempsey (Meath West, Fianna Fail)
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I regulate a small proportion of the——
Tommy Broughan (Dublin North East, Labour)
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He regulates all of them.
Tommy Broughan (Dublin North East, Labour)
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He is the regulator.
Brendan Howlin (Wexford, Labour)
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Allow the Minister to respond.
Noel Dempsey (Meath West, Fianna Fail)
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I do not regulate all of the fares, as only a small proportion is approved by the Minister.
Noel Dempsey (Meath West, Fianna Fail)
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All of the promotional fares are a matter on which the companies decide and over which I have and seek no control. Dublin Bus and Bus Éireann are losing money because they are losing passengers.
Tommy Broughan (Dublin North East, Labour)
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Would the Minister accept——
Noel Dempsey (Meath West, Fianna Fail)
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There is not much point in running buses around the place just to have them running around.
Tommy Broughan (Dublin North East, Labour)
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Our Polish friends have gone home. Is that not right?
Brendan Howlin (Wexford, Labour)
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Allow the Minister to conclude. We have gone over time on this question.
Tommy Broughan (Dublin North East, Labour)
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He knows nothing about Dublin.
Noel Dempsey (Meath West, Fianna Fail)
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Some 1.7 million people live in the greater Dublin area. It is a large market. If Dublin Bus management and unions get on with the job of reforming and putting networks, automatic vehicle location systems and so on in place, there will be a bright future.
Brendan Howlin (Wexford, Labour)
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Deputy O'Dowd can ask a brief question.
Fergus O'Dowd (Louth, Fine Gael)
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The Minister has not seen the key point. Is he aware that when a private bus operates on a PSO route, the taxpayers' subsidy is to the PSO and not to the bus itself? However, both Dublin Bus and the PSO are subsidised on the route. This is the difference.
Brendan Howlin (Wexford, Labour)
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The Deputy has made his point.
Fergus O'Dowd (Louth, Fine Gael)
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More private buses operating in the Dublin Bus area would reduce the cost to the taxpayer. They operate in the Bus Éireann area. This is the difference between the two companies. Bus Éireann has a relationship with private contractors and Dublin Bus does not.
Brendan Howlin (Wexford, Labour)
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As we had gone well over time, I allowed the Deputy on the understanding that he would be brief.
Tommy Broughan (Dublin North East, Labour)
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On a point of information——
Brendan Howlin (Wexford, Labour)
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As the Deputy knows, there is no such thing as a "point of information".
Fergus O'Dowd (Louth, Fine Gael)
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It is a Thursday point of information.
Brendan Howlin (Wexford, Labour)
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He can ask a brief supplementary question.
Tommy Broughan (Dublin North East, Labour)
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Regarding this matter, why do Fianna Fáil and Fine Gael not form a national Government and allow the Labour Party to be the Opposition? We have nothing in common with their positions.
Fergus O'Dowd (Louth, Fine Gael)
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The Labour Party has nothing in common with the public.
Tommy Broughan (Dublin North East, Labour)
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I hope that, after the next general election, Deputy Broughan will remember that his party has nothing in common with Fine Gael. People outside the Houses know this and will return a Fianna Fáil-led Government.
Fergus O'Dowd (Louth, Fine Gael)
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Deputy Broughan has nothing in common with his own party.