Sean Barrett (Independent) | Oireachtas source

I was welcoming the Minister of State to the House. We held an interesting debate on some related matters last week. The Minister of State raised a valuable point about a matter on which he was working, namely, the empty leg of a school bus trip when the driver goes home after delivering the children to school. The Minister of State wondered whether there would be any way to use that leg in rural areas where there is a deficit of formal public transport. He would like to develop this initiative and I commend him on his idea.

I will address the amendments in one moment, but the previous way of dealing with this issue was the rural transport initiative, which spent ¤9 million on 500,000 journeys, amounting to ¤36 per round trip. The Minister of State's proposal is an advance on this and illustrates that he is thinking outside the system.

Having run out of money in the middle of the year and needing an extra ¤36 million, the company covered by this Bill is seeking more borrowing powers. Two problems inform the amendments that I have tabled, of which monopolistic thinking is first. Since the 1930s, a significant amount of public money has been given to a single company and there has been no competition for those subsidies. A grant was directly awarded, but this is an inefficient system. Much to the annoyance of the then Senator Paschal Donohoe, the 2009 debate on that grant was guillotined. Even the amount of time that the then President had to read the documentation on that uncompetitive way of doing business was curtailed by the invocation of a section of the Constitution.

We need more than one instrument to realise what we seek to do in terms of transport. We also need a much higher standard of evaluation of investments. Left to itself, CIE will get into trouble again, the Minister of State and his successors will come to the Seanad looking for more money and the projects will not be evaluated.

Amendment No. 1 attempts to address these problems. As proposed by the Minister of State, page 3 of the Bill reads: "the Board may, other than for the purposes of capital expenditure". This relates to non-capital borrowing and should read "other than for the purposes of capital expenditure and the distortion of market competition". I have misgivings about non-capital borrowing. With capital borrowing, there is at least the pretence that an asset is being created.

Can we address the underlining productivity problems to which the Minister of State referred last week? There has been a 20% reduction in passenger numbers and an estimated 95% of rail freight has disappeared in a ten or 15-year period. If the lost passenger kilometres and freight tonne kilometres are divided by the number of staff, productivity has declined despite a considerable programme of capital investment.

For what will the money be used? As the Minister of State mentioned, it will be for non-capital purposes, but it should not be used to distort competition further. The October 2011 AECOM-Goodbody review of Iarnród Éireann contained a wealth of evidence. On routes from Dublin to Belfast, Cork, Waterford and, notably, Galway, there is an active, growing, independent bus sector. For example, there are 45 frequences per day to Galway. This expansion in particular has taken approximately 45% of business from trains. The overall decline in train passenger numbers is approximately 20%, but the Galway route has lost approximately 40%. Many customers want to use that route, as the motorway has improved accessibility. They are obviously attracted to this option, as they have diverted to it. For the taxpayer, the attraction is that the companies in question do not ask the Oireachtas for money on a regular basis. Their investments must be in the marketplace and meet the criteria, which is not CIE's record.

The Minister for Transport, Tourism and Sport intends for these moneys to be used to meet obligations to the National Transport Authority, NTA. The Bill reads: "for meeting its obligations and carrying out its duties". My problem with this is that there was no competitive tendering for those obligations. Through my amendment, I hope to provide the NTA with a say over the ¤36 million emergency funding. The increased borrowing from ¤107 million to ¤300 million should at least be used for purposes that are not decided by CIE, but by the independent NTA and, as I call for in subsequent amendments, the Minister.

I fear that this problem will recur. CIE has a record of looking for more money and the Department has a record of not listening to alternative service suppliers, yet those services are being readily availed of in the open market, particularly on the routes to which I referred. Policy is being made in too narrow a circle. The House should not vote money to disadvantage further those people who do not ask us for subsidies and who compete openly in the market. The issue of what the money will be used for is crucial. The Bill specifies that it is not to be used for capital purposes, but I would add that it should not be used to distort competition and drive out of business those companies that pay their way.

This has been a problem for many decades. As Mr. Justice Bryan McMahon found in the Swords Express case, the Department doubly disadvantaged the applicant. Galway deregulation occurred because Mr. Pat Nestor took the Department to court. The Department has a bad record of seeking market alternatives. Unless the House and the Minister of State make a stand, this money will likely distort competition further. A company that has received free buses from the taxpayer and more than ¤500 million in Exchequer grants is competing against companies that pay for their own buses and never seek operating subsidies. We must ensure that this situation does not continue. I appreciate the Minister of State's wish for this money to be used to meet CIE's obligations and to carry out its duties and for them to be independently specified. This is the purpose of amendments Nos. 1 and 2. May I discuss amendment No. 3?