Alan Kelly (Tipperary North, Labour) | Oireachtas source

I thank Senator Barrett for his substantial contribution. There is an ongoing debate on the public service obligation, the subsidy paid to CIE and getting the balance right. The issue of the percentage of the bus market - the position with regard to the rail market is more realistic - that should be open to liberalisation and privatisation in order to impact on costs also comes into the equation. We are in the middle of a sensitive period in this regard, particularly as the position of the bus market is currently being considered by the Government. I do not, therefore, wish to comment in any great detail on this matter. I will, however, make a couple of points.

Ireland has one of the lowest public transport subsidies in Europe. That is a fact which is often forgotten. In light of the economic situation, the subsidy is going to change. As outlined earlier, we were obliged to invest a considerable amount of additional funding this year. CIE is far more dependent on fares to generate the income it requires than are its competitors in other countries. The company was obliged to cope with a perfect storm in recent years. As a result of the economic situation and the fact that many people either became unemployed or were obliged to emigrate in search of work, it lost many of its customers. It was also obliged to cope with the decrease in the subvention. The process in this regard began a number of years ago under a previous Administration. CIE has also been obliged to cope with fluctuations in fuel prices. Furthermore, the previous Administration also introduced changes to the fuel rebate and this had a net impact of over ¤20 million on the company's finances. A combination of the factors to which I refer pushed CIE into a particular position and that is why this Bill was brought forward.

In the context of liberalising the market, the experience from an international perspective is quite mixed. The initial results in some countries where this has happened - to a large, medium or small degree - show that the state can obtain some savings in certain circumstances. However, in some countries privatisation has led to monopolisation, or a variation thereof, over a number of years and this has led to an increase in the costs incurred by the state. This happens in some instances but not in others. There is no such thing as best practice in respect of these matters in Ireland. We can only learn from other countries.

An analysis would show that various countries had dealt with the matter in different ways with mixed results. We must ensure that whatever we decide for this country, we take into account the permutations involved and understand the circumstances here are different.

We had a number of reports in recent years on bus companies. To be fair to them, the Deloitte report was complimentary to them on the way they handled their affairs. In many cases, they offer a public service obligation service and demonstrate a social conscience in many of their operations. We hear figures being bandied about for costs of certain or potential private operators. I compliment some of the private operators which provide an excellent service and do not denigrate them in any way. However, in some cases, the overheads of private operators are significantly lower than those of Bus Éireann and Dublin Bus. These intangible costs are not often brought forward but must be considered in decisions taken on the merits or demerits of liberalising bus markets. A wider discussion of the liberalisation and privatisation agenda is required. Liberalisation is not the panacea that would solve all of our problems. In fact, that would not be the case.

The Government is examining public transport options to ensure better provision in rural areas in the future. I have spoken in the House previously on integrated transport services. An issue on which I did not go into detail at the time is that we must examine the integration of school and public transport services. I have been involved in considerable discussions on the issue with the Minister of State, Deputy Ciarán Cannon, in the Department of Education and Skills. Bus operators contracted by Bus Éireann do a good job. Bus Éireann also does a good job in providing school transport, but I am concerned that the issue was not examined previously. In many cases, buses travel around the country and to and from schools, which is necessary. We are supportive of this and see it as a social requirement, but they also travel make the return journey in both directions with nobody on board. If these buses were made available for public transport services, a service would be provided immediately across the country. This is an initiative that is seriously being considered by the Government. I hope to progress it in the near future with the Minister of State, Deputy Ciarán Cannon, because it is something that would be most welcome.

I thank Senators for their contributions and welcome their support for the Bill which I commend to the House.