Alan Kelly (Tipperary North, Labour) | Oireachtas source

I thank the Senators for those comments, and I appreciate the spirit in which they were made. I will get to amendments Nos. 1, 3 and 4 in a moment. We are in difficult circumstances. We have had a fairly thorough debate and I hope Senators appreciate the honesty with which I conduct debates every time I come here. I have probably been here on more occasions than most in discussing my areas of responsibility.

CIE was caught in a perfect storm. I am not saying that everything done by the company is perfect as I know that is not the case. Passenger numbers declined, which hit revenues, and the company was also severely affected by the necessity to change the public service order subvention. It was affected by the change in the fuel rebate and fluctuation in fuel prices as well. The combination of those factors had a major impact on the company's circumstances.

I understand the commentary but we should remember that we have one of the least subsidised public transport systems in the 27 EU countries. I remember noting that when I was an MEP. By and large, public transport does not make money, although it is a necessity for a state for other economic and social reasons. Cherry-picking certain components can lead to them being profitable but we must consider necessary integration. That fact cannot be lost.

The Government is in the process of considering bus markets but I challenge anybody to put forward a model that would make competition viable in Irish rail. It would be very challenging to bring about competition and make it profitable. We are in a challenging environment but we must work with what we have. The controls referenced by the Senators, and which are noted in the amendments I will address in a few minutes, are being dealt with by the Department. There is a hands-on relationship between the Department and the company that is necessitated by the current environment. This is relevant to the issues contained in the amendments, although there are practical reasons I will not accept them. I nevertheless accept the spirit in which the amendments have been tabled. The issue is in flux and must be managed. I welcome Senator Barrett's comments regarding rural transport and the operation of school bus services.

I cannot agree to amendment No. 1 as the reference to distortion of market competition is not appropriate to a general provision dealing with shareholder consent for borrowing by CIE. It is implicit, in any event, that Ministers must have regard to EU state aid rules and competition law requirements, and I am sure the Senators are well aware of that in so far as such matters may arise in granting consent to specific borrowing proposals.

Amendment No. 3 is not warranted. The intention of subsection (3) is to enable CIE to offer security for its borrowings. The wording is similar to that used in other legislation conferring this power in respect of the granting of security to lenders. Subsection (3)(b) as currently worded merely provides that the priority of security arrangements may be agreed with lenders. Where such security is required, the current text provides that the terms and conditions of such security for loan finance necessitates ministerial consent under subsection (1). The Minister has the ultimate power in that regard. I do not favour amendment No. 4 as it is not appropriate to a provision dealing with security arrangements for lenders.

Coming into this Department I had to assess, with my colleague, the Minister, Deputy Varadkar, many of the options in terms of competition, its impact in regard to Bus Éireann, the Expressway routes, whether some areas have improved and so on.

We also have to examine international comparisons and I will make two general points on that because they may shape some of the other comments on the amendments. First, I believe there is no such thing as best practice; there is practice in circumstances. Ireland is different from Britain which is different from France and Germany. One size does not fit all. We can take practice and circumstances and we can learn from what others do but all circumstances are different and we must shape policy in accordance with the requirements of each individual state and its needs for public transport. I would do that in every other area.

Second, we must understand that competition imposes other responsibilities in regard to the interoperability and integration of services. I am working hard on many integration services and whether it be the Leap card, which I had to take over to get it over the line, various other national journey planners or integration of timetables across services, they must all be borne in mind to ensure that we do not lose out wherever there is an opening up of markets. There are experiences in other jurisdictions where there are savings to the state and profit making by private operators, and fair play to them, but over the medium to long term we see that in many cases competition deteriorates. I give the example of Sweden in that regard. Those are two points to bear in mind regarding that general topic. I oppose the first three grouped amendments for the reasons stated even though I acknowledge they were tabled because of the sincere wishes of the Senators.