Written answers

Thursday, 7 November 2013

Department of Transport, Tourism and Sport

Public Transport Subsidies

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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20. To ask the Minister for Transport, Tourism and Sport the rationale for the reduction in the State subsidy to Dublin Bus over the past years; and if he will make a statement on the matter. [47178/13]

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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53. To ask the Minister for Transport, Tourism and Sport if he will provide an update on the financial position of Dublin Bus; and if he will make a statement on the matter. [47118/13]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 20 and 53 together.

In relation to the question as to the rationale behind the reduction in the level of subvention to Dublin Bus, the answer to that can be found in the state's overall financial position and the significant cuts to public expenditure that have been required as a result.

The Government attaches great importance to the continued operation of Dublin Bus, which is vital to so many of our citizens and to the successful operation of the Irish economy.

Dublin Bus has incurred losses of €72m over the last six years 2008 to 2012 even after receiving considerable subsidies, a position which is unsustainable. During that period it has also received substantial additional support from Government in a number of forms, including  €392m in PSO payments, €65m for capital purposes such as the enhancement of services and provision of new buses and €102m to cover the cost of free travel. This comes to a total exchequer funded support of €559m over that five year period.  For the years 2013 and 2014 further support of €227m is being provided across these three areas.

For the last full year we have of 2012, the total State support for Dublin Bus across the three headings for PSO, capital support and support to cover the cost of free travel was €118m, a higher figure than at any time since 2008.

Since 2008, Dublin Bus's financial performance has been severely affected by the economic recession which has resulted in a significant reduction in passenger numbers, with a total drop in journeys between the peak in 2007 and 2012 of 22% and by its failure to achieve the required level of cost savings, albeit that significant savings have been achieved. The company developed a 5 year recovery plan (2012-2016) to bring the business back to profitability. The NTA has recently granted further fare increases to the company that will be effective in 2014. The fare increase determination by the NTA assumes the achievement of the cost savings outlined in the Dublin Bus recovery plan.

The total PSO subvention allocated to Dublin Bus by the National Transport Authority (NTA) in 2013 is €65m.  In addition, the Exchequer, through the NTA, also provides funding for a rolling renewal programme for the PSO bus fleet.  The 2013 allocation for this programme in Dublin Bus is €28m, resulting in the purchase of 80 new buses. A further €21m will be provided to cover the cost of free travel. Bus is still the key public transport mode and it is important we have a reliable and efficient fleet with a reasonable average age.

The total PSO subvention payable to the NTA for 2014 will be €209.7m. (a reduction of €16.8m. from 2013).  The allocation of the 2014 subvention, including the amount payable to the three CIÉ subsidiaries, will be decided by the NTA in accordance with their PSO contracts with the companies. The CIE Group Business Plan has already factored in the expected cut in PSO subvention in 2014 and CIE has negotiated improved bank facilities in relation to refinancing of the Group.

It should be noted that the bus services in Dublin that are not provided by Dublin Bus receive no state support and manage to cover their own costs. Also, Luas operates without operating subsidies from the tax-payer.

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