Paschal Donohoe must stay grounded as he faces down the unions

The franchising model of transport deregulation could cut the cost to taxpayers while ensuring service standards, writes Kyran FitzGerald.

Paschal Donohoe must stay grounded as he faces down the unions

Transport Minister Paschal Donohoe comes across as a polite, yet energetic type, but he now finds himself up against determined opposition in the form of Siptu and the National Bus & Rail Workers Union (NBRU).

The recently appointed minister is discovering that when a cabinet member sets about implementing reforms, it can be the equivalent of trying to separate dogs from their bones and that can prove a painful process.

The bus worker unions maintain a healthy rivalry in the hunt for members; a rivalry that dates back to the mid-1960s. However, the one thing they will not do is pass each others’ pickets. And pickets galore, it seems, is what we are promised for the merry month of May, with up to seven days disruption promised across the network.

Donohoe is one of a rare breed, a frontline politician with private sector experience as a sales manager, but with just over four years of Dáil service behind him, he may well have a bit to learn when it comes to mastery of the dark arts of politics.

The late former transport minister, Seamus Brennan, with a background in accountancy, also had a feel for business. When he came up against the transport unions, a dozen years ago, he had a quarter of a century of service at the top of Fianna Fáil under his belt; and yet he still came unstuck.

A strong supporter of transport deregulation, he tried and failed to open up one quarter of the routes on the Dublin Bus network to competition on a tender basis. He was transferred against his will to the Department of Social, Community & Family Affairs where he, no doubt, reflected on an iron rule of Irish politics at the time.

A minister in a government led by Bertie Ahern tampered with social partnership, and with the trade union establishment, at his or her peril.

Donohoe has been attempting more modest reform, this time around, at Dublin Bus. The aim is to put a 10th of the routes on the service out to tender.

He has a sheriff with the backing of the law behind him. The agreement with the troika provides for liberalisation in the transport area. The unions have made great play about attempts at privatisation, but in fact, the model Mr Donohoe is following is that of transport deregulation, London-style, as opposed to the full-blown privatisation to which the bus services across the rest of Britain were treated.

Donohoe has pointed out that around €180m was provided last year by the Government in the form of investment in new fleets and backing of Public Service Obligation contracts. The Government would like to reduce this burden by leveraging greater investment and innovation from the private sector.

Already, Bus Éireann faces plenty of competition, but in recent times, it has managed to stabilise passengers following a sharp post-recession dip. The downturn hit hard, with Bus Éireann experiencing a passenger drop of almost 28% at the bottom of the cycle. In 2013, however, it carried more than one million more fares than in 2011, with total fares reaching 29.7m.

Dublin Bus is an altogether larger operation with 115m passenger journeys paid for in 2013 . It reversed a five-year long decline in revenue in 2013 as a result of a hike in fares. Late last year, passenger numbers began to recover on the back of a rebounding economy in the capital city. According to company figures it carried 119 million passengers in 2014.

Dublin Bus has replaced part of its fleet and use of its ‘Leap’ card is rising steadily. Quality Bus Corridors are proving to be a success, but the bus network still appears to play second fiddle to rail and tram when it comes to large-scale allocation of public funds.

The bus unions are seeking to recoup foregone wage increases and recover cuts. They view Donohoe’s tentative move, aimed at franchising certain routes, as the thin end of the wedge and are concerned that their members could get caught up in a race to the bottom.

However, NBRU general secretary has made it clear that the union will not try and block franchising as such. The problem is rather that change will be kicked into the long grass, if the unions have their way.

f a compromise of sorts could be reached, involving some form of guarantee of wages and conditions for the existing workforces as part of a franchise arrangement, there is real potential for business growth.

In 2012, a Dublin City Centre Business Association survey revealed that just over one third of respondents would prefer to access the city centre by bus, with just one in five opting for the car. The bus ticks a lot of boxes as a form of transport and the franchising model is one that is working well in London with high satisfaction rates and growing passenger numbers.

Scores of different companies service the public under a system which combines competition by means of tenders and a strong element of central regulation, to ensure that high standards are maintained. It’s 30 years since transport deregulation and privatisation was pushed through by the Thatcher administration. There is evidence that the free-for-all privatisations of bus services, outside London, have not worked particularly well, with fares rising by more than 30% ahead of inflation and user numbers falling.

It is a different story in the capital, however, where a strong local transport authority has ensured that competition has worked in favour of customers. There, the number of fares paid for has doubled since 1986.

Paschal Donohoe’s rather cautious, ‘toe in the water’, approach to reform is understandable given the political realities. His party’s coalition partner, Labour, has enough on its plate without being associated with a full-blooded farming out of routes to the private sector.

However, his initiatives should be supported as they are likely to be accompanied by a stepping up in the pace of innovation and a reduction in the subsidy requirement that weighs so heavily on the taxpayer.

Interestingly, Chambers Ireland — the umbrella group of local chambers of commerce – has given its backing to competitive tendering over full-blown privatisation of bus services. The state company incumbents have introduced some positive initiatives, but they are hamstrung by the limitations imposed by the requirement to maintain existing routes.

The city services do not sufficiently reflect the changing patterns of city life. It is understandable that the unions should seek to protect their members’ pay and conditions, but taking to the picket line to block change is hardly the way to go.

The franchising model of transport deregulation could cut the cost to taxpayers while ensuring service standards, writes Kyran FitzGerald

Guarantee of wages and conditions for existing staff could be part of a franchise arrangement

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