Thursday, 11 June 2009
I wish to raise the need for the Minister for Transport to instruct Dublin Bus to cease predatory activities against private operators in the Dublin region, as exemplified by the recent issues between Swords Express and Dublin Bus. The Minister for Transport will be familiar with the issue of the Dublin Bus monopoly indulging in predatory pricing. Circle Line has already claimed that it was forced to go into liquidation in June 2008 owing to unfair competition from Dublin Bus and because it was subject to route saturation from Dublin Bus immediately after it started. This is a problem no Department or Minister should tolerate and it raises questions about the attitude of the Department of Transport to competition.
I am specifically drawing attention to the situation in Swords in north Dublin because it is an especially bad case of Dublin Bus indulging in predatory pricing where it faces competition. Swords, as the Minister knows, is Ireland's largest town, but many parts of it do not have a regular express bus service to the city centre. The only choice people have is to take a circuitous route on Dublin Bus or to walk the whole way. Some parts of Swords have no service outside peak times. When a private operator offered to provide a service for the people and take on that risk, the people of Swords welcomed it. It was no surprise that Dublin Bus suddenly decided, having inadequately provided for this route, to provide adequately for it. In this case, when it saw a private operator working, it descended on the route and gave it saturation coverage. That is empire building - putting the private operator out of business then removing the fleet and going back to square one. It is unacceptable.
In this case the private operator must compete with a State subsidised service which was commenced after Swords Express started its operations. Swords Express wants to provide an all-day express bus service to north, south and west Swords but is being thwarted by the Department of Transport because for some mysterious reason the Department will not issue Swords Express with a licence. It is now 16 months since the company applied for a licence and it wants to extend that service until much later in the evening. It is not being allowed by the Department of Transport. It is obvious the Department in the issuing of licences in this case and others is giving preferential treatment to Dublin Bus.
This is not the way in the present circumstances, where small businesses are crying out for help, to assist a small business to give employment and I suspect there is more to this than just the semi-State monopoly ethos. I guess there are trade unions behind this that oppose competition at all costs. It is one example of the predatory pricing in which Dublin Bus has indulged. I ask the Minister to act now before a crisis occurs for the company and to put an end to such practices by a semi-State body for which he has full responsibility.
The Senator has raised concerns about Dublin Bus engaging in predatory behaviour in the operation of its network of services in Dublin and has referred specifically to the routes operated by Swords Express between Swords and the city centre and by Dublin Bus on the 41X service from Swords to the UCD campus at Belfield via the city centre. Dublin Bus has operated for some years a range of services between Swords and the city centre and, in particular, operates six services a day on the 41X services between Swords and Belfield via the city centre. These services are provided in the morning only.
In October 2007, a licence was granted by the Department of Transport under the Road Transport Act 1932 to Swords Express to operate 91 services per day between Swords and the city centre via the Dublin Port Tunnel. Subsequently, Dublin Bus notified the Department of its intention to re-route some of its existing services, including the 41X service from Swords, through the tunnel to provide customers with a faster journey time.
In response, the Department advised Dublin Bus on 20 February 2008 and again on 20 March 2008 that its proposals in respect of the 41X services would give rise to competition with the licensed service by Swords Express. The company was accordingly advised that should it wish to pursue the introduction of the proposed service changes, it must apply for the Minister's consent under section 25 of the Transport Act 1958. Alternatively, the company was advised that it could review its proposals to avoid competition with the licensed operator.
On 5 June 2008, Dublin Bus submitted a revised proposal for the rerouting of the 41X. The Department considered the proposal and was satisfied that the changes proposed would not compete with the Swords Express service and concluded, therefore, that it did not require ministerial consent in accordance with section 25 of the Transport Act 1958. Dublin Bus was advised on the 12 June 2008 that it could proceed with the proposed changes.
That determination was the subject of a High Court challenge in October 2008 brought by the operators of the Swords Express bus service. As part of the out of court settlement of the High Court proceedings, the Department undertook to carry out an investigation under section 25(2) of the Transport Act 1958 regarding the decision in respect of the 41X service and the parties were invited to make submissions as to whether the Minister should grant consent under section 25(1) of the 1958 Act to Dublin Bus to continue to operate the 41X service on its current route.
Having considered those submissions, the Minister has confirmed that consent. However, as consent under section 25(1) of the 1958 Act is based on the determination that the service is in competition with the Swords Express service, Dublin Bus has been informed that State funding cannot be allocated to the operation of the 41X service. The company has, therefore, been requested to provide the Department with confirmation of compliance with that requirement. It is open to Dublin Bus to present proposals to the Department for an altered service on the 41X route that would not compete with the licensed operation. The operators of the Swords Express service are being advised of the position.
I am not in a position to say how it will be done but I will ask the Department to respond to the Senator. Subsidies are paid to Dublin Bus and under section 25(1) in such circumstances it is not allowed to compete with another operator. If it wishes to provide a service that is not subsidised, it must submit a proposal. Otherwise, there is the alternative of not going into competition. Those are the two options.