Monday, March 27, 2006

Privatising the Bus Eireann

Fine Gael are on of the odd ones out of Irish parties of late. It is the only party with a leader that is not from Dublin. Even though Dublin only has about a quarter of the population it has far more of a share of the power. Of the ten Taoiseach’s in history only 4 have been TD’s for constituencies outside Dublin and one of them John Burton was not far from Dublin. Even though Enda is from west of the Shannon much of their energies are centred in Dublin. This I guess has a lot to do with the fact that they basically got creamed in Dublin losing about 9 seats out of 12. So it is no wonder that they focus on Dublin. Anyway one of there recent announcements is about the Buses in Dublin.

Olivia Mitchell TD “Can somebody please explain why Dublin Bus will need fewer new buses in 2010 than it needs in 2006? Dublin is seeing massive population growth, yet a new report out from Dublin Bus this week has slashed the number of new vehicles being sought by the company.

Dublin Bus now wants an extra 425 vehicles by 2010. But in 2000, the Scott Wilson Report was calling for an extra 500 buses by 2006. Is this a joke?

Fine Gael solution “Fine Gael has put forward a viable solution that would mix public and private sector services to ensure that passengers come first.” This is indeed close to a real solution. Wulbeorn has previously talked about this as well pointing towards comments by PD Spokesperson on Transport Senator Tom Morrissey “Why should the taxpayer fund 120 extra buses at a cost of some €300,000 each while there are 5,000 under-utilised buses in the private sector?” The PD’s and FG seem to have the right solution but the question has to be asked why are they not implementing this. Market Liberalisation is essential to deliver better services and indeed is seemingly at the basis of there parties philosophy. So why is it not being implemented. The only explanation I can see for it is that Fianna Fail are dead against it and the PD’s are not forceful enough about it.

But it should be on more then just a Dublin solution. Bus Eireann being a state funded company can always undercut every other player on a route. They can operate at a loss until the competitor leaves the market then put the prices up when the competitor goes bust. As has been shown on some of the major routes competition has driven prices down. In some cases slashing the prices by half. Cost and availability are the main factors that deter people from using public transport. The Green party have talked about diverting much of the funds from the roads network to public transport. This is needed but if private enterprise is successfully brought into to market then the funds could better spent on education or health.

But don’t get me wrong the market is not the solution to all problems. Many routes in Ireland and especially rural Ireland are not commercially viable. These routes are vital to the local communities. I live in a rural area and use the bus. While it is quiet expensive and smelly it is a lifeline for the old and the poor who can’t afford cars. This has to be protected. The reason for the State in business is because they are the only ones that can do it. They should only be involved in offering bus services where no private business are going to set-up in an open market but where there is going to be competition the state should not be allowed to be in an denominated position. If the state sells the profitable parts of Bus Eireann the reduced cost of having not to have to continually buy hundreds of buses will allow them to concentrate on what they are needed for. Routes that are required where the market will not work. But will any party go the whole hog and implement it?

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