No talk of privatising bus service, says Shane Ross

Transport Minister Shane Ross has ruled out privatising Bus Éireann which is in stark financial difficulty.

Mr Ross told the Cabinet that the State-funded bus service could be insolvent within 24 months if it cannot overhaul its finances. However, he said axing routes that are loss making has not yet been discussed.

Bus Éireann is expected to lose about €5.6m this year, after similar losses in 2015, much of which relates to its commercial Expressway routes.

The company is putting a restructuring plan in place.

At the same time Bus Éireann staff are seeking a 21% pay rise but the company has said it could not afford any wage increases at the Labour Court this week.

Dermot O’Leary of the National Bus and Rail Union (NBRU) said it is “bizarre, unprecedented, and a debacle” that Bus Éireann management did not come forward with proposals at the Labour Court.

Responding to questions from Sinn Féin’s Imelda Munster in the Dáil, Mr Ross said he had updated ministers on the huge deficit but added that he did not speak about cutting routes.

“Nor was there any question of privatisation. I wish to reassure the deputy that there was no question of talking about privatisation yesterday,”he said.

Fianna Fáil’s Robert Troy said there is “major anxiety” about what is happening with Bus Éireann. He said the minister had failed to act on the issue until this week despite being away of the financial woes since the summer.

“People are terrified that they will not have a bus service in the new year. Quite frankly, the minister has done nothing to alleviate those fears — in fact, he is stoking them even further.

“He has a significant role to play, given that he is the main shareholder in the company,” said Mr Troy.

However, Mr Ross said he has been briefed repeatedly on the issues faced by Bus Éireann, including the issue of the pay claim lodged by trade unions. He added that he has met the chair of the company twice in recent months, including this week,

“As shareholder, I do have a view that Bus Éireann’s financial challenges should be tackled decisively and effectively so that the company can be viable and serve its customer base on a sustainable basis,” he told the Dáil.

Although Bus Éireann claims much of the losses relate to its Expressway routes, Mr Ross confirmed in the Dáil that in 2017, public service obligation funding for public transport services that are not profitable will increase by 11%.

“In addition, I will be providing funding for more than 180 new buses comprising 110 buses for the Dublin region and more than 70 buses and coaches for the Bus Éireann fleet.”

Separately, Government has yet to decide where the €50m needed to fund the garda recommendations of the Labour Court will be taken from.

Minister for Public Expenditure and Reform Pashcal Donohoe said: “I am engaging with the Tánaiste and the Department of Justice at the moment in relation to the funding of the Labour Court recommendation for An Garda Síochána.”

Bus obligations

How does Bus Éireann operate services?

Bus Éireann provides transport services across the country, with the exception of the Dublin region which is provided by sister company Dublin Bus.

The company operates more than 320 routes across the country. These are broken up into public service obligation services and Expressway services.

What are public service obligation (PSO) services?

Each year funding is provided for what is deemed socially necessary but commercially nonviable bus services across the country.

Dublin Bus and Bus Éireann both provide these PSO services under contract to the National Transport Authority (NTA).

Bus Éireann operates 300 PSO routes around Ireland which could not continue without State support.

In 2015, Bus Éireann received a subvention from the State as payment for its PSO services of €33.7m.

The previous year it was allocated €34.4m to prop up bus routes across the county.

However, State funding to Bus Éireann has been cut by 35% — or €16m — since 2009.

In the Dáil yesterday, Transport Minister Shane Ross said that PSO funding for public transport service contracts — which also takes in railway routes — will increase by 11% in 2017.

What are Expressway routes?

Bus Éireann has 23 Expressway routes, which are commercial routes and get no State funding. These include Dublin to Belfast; Dublin Airport to Cork; Tralee to University of Limerick and Dublin to Waterford.

What are the financial issues at Bus Éireann?

The bus company lost €5.6m in 2015 and is forecasting a similar deficit for 2016, it has said this is mainly due to losses on commercial Expressway services, which receives no government subsidies.

Mr Ross has warned the Government that the service could be insolvent within two years if it is not dramatically overhauled.

As a result the company is now pressing ahead with a cost reduction plan.

What do workers want?

Bus workers have demanded a 21% increase in line with the pay rise Dublin Bus employees received earlier this year.

However, given the significant losses and the immediate cost savings required to address the crisis, Bus Éireann say they cannot afford any increase.

The company attended the Labour Court with employee unions this week to address a pay claim, but failed to present proposals at the meeting.

A joint statement from NBRU general secretary Dermot O’Leary and Siptu transport sector organiser Willie Noone described the company’s actions as “nothing short of disgrace”, adding that they would now engage in an extensive company-wide consultative process with what is “an extremely angry workforce”.


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