Noel Dempsey (Meath West, Fianna Fail)

The new EU regulation on public service obligations creates the framework that dictates how member states can award exclusive rights and pay compensation for public bus and passenger services in respect of which the public service obligations have been imposed. A specific right is provided for in the regulation to allow one to do this. Under the regulation, which will apply from 3 December 2009, and which will come into full effect on 3 December 2019, member states are being encouraged to take gradual measures to comply with its provision. The chapter we are talking about in the Bill provides for the first time in Irish transport law a contracting regime to govern the subvention of public bus and rail passenger services in respect of which public service obligations apply.

Section 52 establishes that the three CIE companies will have exclusive rights to provide the services that are the subject of State financial support at present and for growth in respect of rail services, subject to future legislative change. In the case of bus services, the exclusive right also is subject to the grant of bus route licences to private bus operators under the Road Transport Act 1932. Direct award contracts will be entered into to support the provision of the services that are encapsulated in such exclusive rights.

Section 48 provides that future growth in the market for subvented public services in respect of which the authority has determined that a public service obligation applies will be addressed by way of contracts resulting from an open tendering process. However, section 52 proposes that the initial direct award contracts in respect of bus services provided by Dublin Bus and Bus Éireann will be for a period of five years. It also provides for the review of such contracts and for the making of subsequent contracts.

As for the Senator's point that the initial direct award contracts are limited to a five-year period, this provision, allied to the review provisions and the power to enter into subsequent direct award contracts, ensures the provisions of EU Regulation No. 1370/2007 will be fully complied with within the timeframe envisaged in that regulation. This section and chapter were carefully crafted to ensure the exclusive rights being granted to the CIE companies, as well as the direct award contracts which relate to them, will be fully in line with Ireland's obligations under the regulations. Accordingly, I ask the Senator to withdraw the proposed amendment.