David Cullinane (Sinn Fein)
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I welcome the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar. I am extremely worried by the proposal, as I see it, to privatise the entire bus service in Waterford city. All five city bus routes and the service to Tramore are to be awarded to private operators from 2016, as well as the Bus Éireann routes serving Kildare, Tullamore, Newbridge, Portlaoise and Athy. This is part of a larger plan by the National Transport Authority to allow private bus operators to tender for services currently operated by Bus Éireann and Dublin Bus.

I must put on the record of the House my complete opposition to the privatisation of public transport, which I believe is not in the public interest. I am absolutely opposed to this nonsensical plan to privatise 100% of the public service in Waterford city and I ask the Minister to explain why that is the case. The NTA's proposals would hand over a significant percentage of the public bus service to private operators. This has been criticised by the Competition Authority. The privatisation of either part or all of the State's public transport network is not in the interests of the public, the staff of Bus Éireann and Dublin Bus or the State.

We have heard criticism at Oireachtas committee hearings and in public by SIPTU and the NBRU, who spoke about the lack of public debate on the issue, problems with a very narrow consultation process and the impact that the Minister's proposals would have on jobs. As we know, the NBRU represents 2,500 employees and is on the record as saying that this is the folly of an "ideologically-based agenda", and it is hard to disagree with that. I must ask the Minister why Waterford is being singled out for what I would see as an experiment. Is Waterford to be a guinea pig, with all the bus routes in the city being handed over to private operators, compared to only 10% of bus routes in the State as a whole? Why is that the case? It is going to cause concern for those who use the bus services in Waterford and for the employees of Bus Éireann.

We are in danger here of confusing value for money with cheapness. All international research and evidence on the privatisation of public transport companies shows that even when they are privatised they still have to be subsidised by the State. We saw that with London Bus. A report on public transport in this State was published in 2009 which found that the level of Government subsidy to CIE and Bus Éireann was relatively low by European standards. It found that subventions to both companies had continued to fall on an annual basis.

I am taking the opportunity here to ask the Minister to rethink this foolish and ill-thought-out plan for privatisation. I also urge him to recognise that, unfortunately, there is a price to be paid and that it costs money to provide a vital public service. Private operators exist to provide a service and to make money, which is fine. However, sometimes bus services are required to meet a social need. We must provide a service to people and there may not be profit in that. While those services must be as efficient as we can possibly make them, it does not always work out that they will be profitable. I hope the Minister is not going down the road of privatising bus routes, with profit becoming the sole motivating factor and services coming a poor second. That is not what we need. Indeed, it would be a retrograde step for public service provision in this State.

My main question for the Minister is why contracts are to be awarded for 100% of bus services in Waterford city when the figure is only 10% across the State. Is it the case, as some fear, that Waterford city is being used as a guinea pig in the Minister's ideological experiment?

Leo Varadkar (Dublin West, Fine Gael)
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First, it is important to say that Bus Éireann is not being privatised. It will remain a State-owned company. The Senator, due to his interest in, if not obsession with, ideology, has not actually looked at this from a commonsense perspective. What is happening is that routes are being tendered out to contract. Different operators can tender for those routes. It is not something that is particularly unusual. It is already the case that the operation of the Luas, for example, is tendered out. It was tendered out very successfully and the Luas service is a very good one, with over 30 million journeys taken last year. It is already the case that a lot of bus services are provided by private operators and are very popular with the public. I ask the Senator to take that into account, to see beyond his own ideology and look at what is happening in the real world and at what real people are doing.

When it comes to the contract that is being tendered out for services for Waterford city and Tramore, it is open to Bus Éireann to tender for it. It can tender for the contract on its own or as part of a joint venture with another company if it so wishes. I totally agree with Senator Cullinane on one point: this is not about savings. This policy is not about savings or reducing subventions. I totally acknowledge that public bus services require a subvention. This is about getting a better service for the Senator's constituents, for the people who live in Waterford.

The NTA will draw up a set of services that it wants provided, it will say there is X amount of money available and will ask the various bus companies what kind of service they will provide for that amount of money. I would expect that whichever company wins the contract will be able to provide a better service for the same amount of money or, at the very least, the same service for an equal amount of money. I would expect in particular that the contract winner in Waterford would provide a weekend service, which is not provided by Bus Éireann currently. That is what this is about. It is about getting better services for the people who live in Waterford with the same amount of taxpayer subvention. If Bus Éireann can provide a better service than it currently does, for the same subvention, then it may be the company that wins the contract.

I understand that politicians come under pressure and heat from those who already have what they want, the existing interests, the "haves" who include the workers, the unions, the company itself and its management. However, I ask the Senator to have regard for his own constituents. How could anyone in Waterford be against having a better bus service at no additional cost to the taxpayer? If, for the same amount of subvention, we can provide a better bus service, how could anyone be against that? I just do not understand it, unless it is some sort of strange ideology that the Senator has which does not take into account that the most important people here are the passengers and the taxpayers. Maybe the Senator thinks somebody else is more important.

I can read the prepared response if the Cathaoirleach wishes but the bottom line is that the decision about Waterford was made not by me but by the NTA. If it was up to me, I would have tendered out a lot more than the 10% that is being tendered out. The NTA made that decision. It did not want to take too much off Bus Éireann because the transition needs to be managed. In Cork, the city is just too big and it could have damaged the future financial viability of Bus Éireann if Cork was taken. Waterford has a particularly bad bus service and a particularly low usage of that service. This is something that public representatives from the region should be welcoming rather than opposing.

David Cullinane (Sinn Fein)
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In response to the Minister, I do live in the real world. In the world that I live in, the Minister's plan is to put out to tender a number of bus routes in Waterford. He has not answered the fundamental question I asked, which is why 100% of bus routes in Waterford city are to go to tender, when the national average is only 10%. Why is Waterford being singled out? The reality is that once those routes are put out to tender they can be transferred from Bus Éireann to private bus operators that operate to make money, not to provide a public service. There is a concern and a fear among people who depend on public bus services. Those services meet a social as well as an economic need. Once we go down the slippery road of transferring the provision of services from the State to private operators, in time we could see fewer services. We will see the colour of the Minister's money on the question of whether we actually get improved services. I attended a launch a number of years ago of transport plans by one of the Minister's predecessors in the role, who lived in Waterford. We were promised super buses and all sorts of service improvements, which never came, a bit like the hypothetical bus.

Paschal Mooney (Fianna Fail)
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The Senator is supposed to be asking a supplementary question, not giving a Second Stage speech.

David Cullinane (Sinn Fein)
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We will have to wait and see in that regard. Leaving aside the merits or otherwise of the Minister's overall plan to transfer services from Bus Éireann and Dublin Bus to private operators, I ask him to explain why Waterford has been chosen to have all five of its bus routes put out to tender, which is 100%, as compared to 10% across the State. Why is that the case?

Leo Varadkar (Dublin West, Fine Gael)
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I agree that we will have to wait and see, and what I hope we will see in 2016 or 2017 is other people around the country, in other cities, looking at how much better the bus service in Waterford has become. I hope to hear those working in policy areas describing how the number of people using the bus in Waterford has increased and asking why it cannot be done in Limerick or Galway too. That is what I want to see in a few years' time, but we will have to wait to see whether it works.

As I mentioned earlier, the decision on Waterford was made not by me but by the NTA.

It would not make sense to tender out every tenth route because routes go into depots. One cannot tender out one tenth of a depot. A group of routes needs to be taken together.

With regard to the Waterford services, the National Transport Authority, NTA, noted the simplicity of tendering a comprehensive city operation and that the size of the tender package would make it attractive to the market. It would also offer the future opportunity to the NTA to benchmark a regional city bus operation.

Tendering of Galway and Limerick services was also considered as they are sufficiently large to attract interest from potential market entrants. However, they are also sufficiently small that bus and depot transfer from Bus Éireann may not be essential to secure an economically advantageous tender price. Waterford is the smallest city operation and can be grouped with services in other cities, thereby creating a geographical spread of tendering opportunities.

Tendering Cork city services was also considered an option but these services comprise almost 20% of the Bus Éireann PSO, public service obligation, operations. The consequential management of a 20% downsizing in terms of staffing and overheads would be very challenging to achieve without triggering a need for an additional PSO subsidy. Consequently, tendering the entire Cork network is not recommended, although individual corridors were considered.