Dessie Ellis (Dublin North West, Sinn Fein)
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592. To ask the Minister for Transport, Tourism and Sport if he expects specific savings or changes in the public service obligation funding as a result of the introduction of open tendering and to set out in tabular form his rationale for the expected savings. [11458/16]

Shane Ross (Dublin Rathdown, Independent)
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​As the Deputy is aware, publicly subvented, or PSO, bus services in Ireland are provided by operators in accordance with the Dublin Transport Authority Act 2008.

There are two principal methods in which PSO public transport bus service contracts can be awarded by the National Transport Authority (NTA). One method is to directly award the contracts to Dublin Bus and Bus Éireann and the other is to invite operators to tender for the right to operate the services and then grant the successful tenderer the right to operate the services for the contract period.

Across Europe, there has been an increasing move to invite operators to tender for the right to operate PSO bus services. These systems are now well established in various countries and cities across the European Union and experience demonstrates that savings of between 5% and 30% have been achieved from an open competition for public transport service provision as opposed to directly awarding the contracts.

In accordance with its statutory powers under the Act and following a public consultation process and assessment, the NTA made a decision to tender approximately 10% of PSO bus services currently operated by Dublin Bus and Bus Éireann. Tendering will give the opportunity to test market pricing and offer possibilities to improve efficiency and customer service. The contract will go to the tenderer who can provide the best service for the least subsidy and should assist in securing efficient and cost competitive services for passengers; it will also give a value for money outcome for taxpayers. The NTA will announce the outcome of the tender process later this year, with the new public service contracts expected to commence in early 2017.

In line with international experience elsewhere, I have been advised that it is expected that savings will indeed occur in the operational cost of the routes that are being tendered as compared to present; however, obviously the quantum of such savings can only be measured following completion of the tendering competition. 

I think it is vitally important that we not only strive to ensure integrated and quality public transport services but also that we strive to ensure value for money in the allocation of taxpayers' money. I believe that the process underway will allow us to capture potential benefits as regards value for money and quality and I look forward to the NTA's announcements as regards the competitions later this year.