Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State to the House.

What we are faced with is that CIE is simply not a competitive company, and Senator O'Neill spoke well on it. We have been bailing it out, one way or the other, since 1932. We have spent 80 years trying to control its competition. Once there were 70 bus companies in Dublin and many up and down the country. Most of them were eliminated to create this monopoly and then there was a pattern of subsidies. That all continues.

According to the CIE annual report for 2011, the subsidy was ¤542.422 million. The PSO grants amounted to ¤163 million for Irish Rail, ¤73 million for Dublin Bus and ¤43 million for Bus Éireann. Other Exchequer grants under the national development plan amounted to ¤243.660 million. A subsidy of ¤0.5 billion plus is massive. As the Minister of State said, the group still ran out of money in the middle of this year and needed ¤36 million urgently. I worry about how the Minister did not know what was happening earlier in the year. Indeed, there were concerns here in this House that the emergency requirement for money arose after the Dáil and Seanad adjourned for the vacation.

The traffic data is falling, as the Minister of State said. As a person who is with young people all the time, I can see that. Since the motorways have been built, the competing independent unsubsidised bus companies offer, as far as young people are concerned, a much better product. They introduced WiFi first. Bus Éireann is looking for money to catch up in that regard. Aircoach, Kavanagh, and Matthews, between Dublin and Dundalk, question why we need to keep subsidising CIE to the degree that we do. The Department, in the Public Transport (Regulation) Act 2009, showed a blatant bias - I would say, discrimination - against competition. They gave the entire network to one company without any competitive tendering under a direct award contract, including all of the investment grants. One in the private sector is trying to compete with Bus Éireann and it can have a double-deck bus, worth ¤400,000, free and one can still win on price. This is the kind of entrepreneurship that the economy needs. It is a kind of competitive pressure under which CIE deserves to be put.

I welcome the Minister's emphasis on it being a business. It is there to satisfy consumers. The consumers are deserting and the company must respond to that. One need only look at some of the problems in the past, for example, that the airport was served by a monopoly bus company which decided that Busáras was the centre of the world and Aircoach really showed up that model. The folklore in the Department was that one could not persuade car owners to leave their cars at home and go by bus, and the success of Aircoach proved the Department wrong. The licence was won by Mr. John O'Sullivan, who used work in CIE, and maybe there is entrepreneurship there that should be allowed out.

I note also that two senior assistant secretaries in the Department, Mr. John Lumsden and Mr. Pat Mangan, wrote about the lack of any counter-culture or devil's advocacy within the Department. It seems to be so wedded to a monopoly, so weak is it on investment appraisal. Transport 21 proposed spending of ¤34.4 billion. I was at the launch in Dublin Castle in 2005 and there was not a ha'penny worth of economics unveiled with it. It has been engineer-dominated. That world has changed and the motorway system has allowed competing bus companies to attract most of the young people.

Rail travel between Galway and Dublin has declined from 1.6 million to 1 million. There are 45 buses a day by different companies which do not require investment grants from the Department and do not require operating subsidies. The Department must look at the alternatives, particularly at a time - there was the legislation yesterday - of fiscal responsibility.

What did we get for the ¤542 million in 2011 that was given by the Department to the CIE companies? Clichés, such as this or that was a success, are no longer enough. I passed by, on the Navan Road, a 1,200 space car park at Pace, the M3 Parkway and I have never seen more than 100 cars in it. That constituted a massive investment yielding no return of any kind that I can see, and that is the tradition.

I worry about the weak capital investment appraisal tradition in the Department of Transport, Tourism and Sport. The new Department of Public Expenditure and Reform and, indeed, the Department of Finance will have to take a stricter line on that. I also worry about borrowing for non-capital purposes. We have to get some return on this. I worry about not seeking value for money for the subsidy and ruling out, in such a blanket way, the fact that necessary public transport - as other Senators have said - can be provided by anybody except the State's own company. There must be some distance between the State owning a company and regulating the market. Nonetheless, that distance is transgressed overall on the wrong side. The bias against alternative ways of providing transport in this country should not really survive for much longer, given the overall difficulties of the national finances. There are alternative people there.

The Department's dedication and devotion to Aer Lingus as a monopoly access transport provider held this country back for years. Eventually, that was changed by a revolt in parliament and fares went down while volumes went up. Where we have opened up routes like the Dublin-Galway one, where there used to be one bus per day in a monopoly situation, there are now about 45 and the fares are lower. The fares also fell on the Dublin-Cork route when it ceased to be a monopoly.

The Department must develop a focus of getting better value for the taxpayer and the consumer. If that requires radical change within CIE, then that is right. It is there to satisfy the needs of a wider public, not to lobby always for huge investment grants and subsidies, including subsidies for non-capital expenditure.