Explaining a career switch from global giant Coca-Cola to semi-state Bus Éireann would probably be beyond most executives, but Bill Lilley keeps it simple.

"Before I was producing and moving cases of soft drinks, now I am moving people; it is that simple" says the man who left Coca- Cola Ireland after 25 years to take over as chief executive of Bus Éireann.

And, in the week when the company and its parent, CIÉ, produced their annual figures, Mr Lilley also quibbles with the idea that he has kissed goodbye to multinational efficiency and slick marketing to join a company that knows little about profits, efficiency or marketing.

"If you look at the history of Bus Éireann since 1987, it's always had a commercial ethos," he says. This year, he says, the company expects to break even.

He insists it would be producing handsome profits if the traffic congestion all over the country were not so acute. Research carried out for the company says congestion is costing Bus Éireann a staggering €18 million a year.

"We have serious congestion in Dublin, coming into Dublin obviously. Limerick is one of the worst areas in the State. There's Cork, Galway. We have pinch points all over the country.

"So, for example, if you're driving south, it will take you half an hour to get through Fermoy on a Friday evening," he says.

He accepts that all bus companies, including the private ones, have to contend with this problem but, because of the size of Bus Éireann's network, it suffers more than most, at least its drivers do.

"If we were able to travel at European speeds and that is what we benchmark ourselves against, we could do it with 80 vehicles and 100 drivers less. The main objective has to be a modal shift. That means more people using public transport rather than cars," he states.

One solution would be to let bus companies use the hard shoulders, but so far there has been little progress on that.

While the traffic problem continues to act as a restraint on the company's profitability, one suspects Bus Éireann, which has little debt on its balance sheet and a relatively modern fleet, might be even better outside the CIÉ group of companies.

Pondering that question right now is the Minister for Transport, Mr Brennan, who wants all three constituent companies of CIÉ - Dublin Bus, Bus Éireann and Irish Rail - to go their separate ways.

Mr Lilley is reluctant to deal with this question directly, but he does reflect on what happened in Britain when deregulation was introduced.

"What happened in the UK in the 1980s when deregulation was introduced was that a lot of the businesses were privatised and sold off to management or private operators. A few large operators emerged and they competed for routes by cutting fares and putting loads of buses on certain routes to effectively drive competitors off those routes. The biggies then divvied up the country," he claims. "For customers, the fares went down initially but, overall, fares have increased. In fact, fares increased 40 per cent ahead of inflation, outside of London that is.

"Quality of service has plummeted to such an extent that what you have in a lot of places is restricted services from 7 a.m. to 7 p.m., restricted services on a Saturday and no service at all on a Sunday. That's how they cut costs," he adds.

Whatever is going to happen in Ireland, we should make sure we do not repeat the mistakes of the British, claims Mr Lilley.

He also warns that transferring all the property held by the CIÉ parent company to its subsidiaries could represent a major hindrance to the Government's plans.

"We would need some balance sheet restructuring. All the property is held by CIÉ. It would take years to transfer all the deeds. There are about 1,000 of them."

Whatever happens, however, he says Bus Éireann is ready. "I smile when people say we should introduce competition. We've had it for years," he says.

With competition on many routes around the State, Bus Éireann is unlike Dublin Bus or Irish Rail in that it has faced competition for years and is used to it.

However, Mr Lilley feels the company has one hand tied behind its back in the fight with the private operators. Bus Éireann must run a plethora of loss-making services and because the Government does not provide a large enough subsidy for them, the company is forced to cross-subsidise the loss-makers out of its commercial revenue, argues Mr Lilley.

Put bluntly, he says the company needs another €10 million each year. It currently gets €21 million of a subvention. "It is never enough," he says.

While a price rise earlier this year eased some of the company's concerns, further rises are needed. "Ideally we should have annual fares increase in line with the consumer price index certainly and maybe in line with payroll inflation. But we are still in a catch-up situation, that's important to remember," he says.

The company is quite happy to take Government-sanctioned price rises and is not too concerned about being more expensive than its competitors anyway.

If it was too competitive private operators might have something to say.

So just how competitive is Bus Éireann on price? "I'll put it this way to you, we don't charge anything less. In some cases we'd be the same, but in most cases we'd be slightly ahead."

Why?

"There would be a deliberate decision not to be any lower because we are the dominant operator. If we tried to undercut, it would be abuse of a dominant position, etc, and we'd be in the courts tomorrow," he says.

One of the most contentious issues facing his company is whether it should have to open up its stations to private operators. Such a move could be ordered by the European Union in the very near future.

"EU policy is a moveable feast. Why should we open our stations to a private operator who has sold a property, a garage they use down George's Quay for €6 million and pocketed the money. And then they are protesting they want to use our stations. And if anyone believes the State built the bus stations, I tell you we cross-subsidised to the tune of €80 million to keep the other services going."

He is even more emphatic than that. "These stations were not built by the State. They were built by a State company and that's the catch.

"But the money was not provided by the State in that sense. It was provided out of commercial operations.

"If you were City Link and you were told you have to use Bus Áras from next week, what would you say? You would say 'I've got my nice little stop on O'Connell Street, why should I move from there'. It would be a competitive disadvantage for them to move to Bus Áras," he says.