Jimmy Deenihan (Kerry North, Fine Gael)
Link to this: Individually | In context

Question 168: To ask the Minister for Transport the reasons he has increased Bus Éireann's public service obligation subsidy to reflect CIE's increased costs and yet refuses to increase PSO payments to an airline (details supplied) to reflect cost increases, for which the Government is directly responsible; and if he will make a statement on the matter. [41010/10]

Noel Dempsey (Meath West, Fianna Fail)
Link to this: Individually | In context

The overall payment to CIE for PSO services has reduced from €308.627 million in 2008 to €276.188 million in 2010. PSO air services are governed by specific EU Regulations for the operation of air services and the State must abide by the tender specifications and applicable provisions of EU law. The current PSO contracts were awarded following an EU public tendering process. Ryanair tendered for the PSO contract on the Kerry Dublin route and we were obliged to take the lowest tender, which was submitted by Ryanair.

The bid met the requirements as set out in the specifications published in the EU Official Journal, which stipulated, inter alia, that three return flights per day would be provided. The bid from Ryanair also set out the compensation it required in order to operate the service. Based on that bid, Ryanair were awarded the contract to provide the scheduled air services over the three year contract period and are receiving payments in accordance with the contract.

I can assure the Deputy that I have fully met my obligations under the terms of the contract and must comply with the requirement of European Law in relation to the operation of the PSO contracts governed by Regulation 1008/2008. It is a matter for Ryanair to ensure that it also meets its obligations under the contract. Subvention payments made to the CIE companies have no relevance to the contractual arrangements relating to the provision of air services to Kerry Airport.