Bus Éireann faces potential EU inquiry over schools contract

Rival coach operator wants State contract worth €160 million a year put out to tender

Bus Éireann faces a possible European Union investigation into its schools transport contract with the Department of Education, which is understood to be worth about €160 million a year.

The State transport company’s exclusive right to operate the Republic’s school transport services has been under pressure for several years from private coach operators who argue that it should be put out to tender.

A spokeswoman for the European Commission’s internal market directorate confirmed on Thursday that it had received a complaint about the arrangement between Bus Éireann and the department.

“The commission services are in dialogue with the Irish authorities to establish the merits of the complaint,” she added.

The commission is looking into whether the department should put the contract out to tender rather than continuing to allow Bus Éireann to operate it exclusively.

The complaint was made by privately-backed Student Transport Scheme (STS), which last year failed in its bid to have the Irish courts order the department to put the contract out to tender.

Meeting

Its representatives and lawyers met officials from the commission's internal market directorate in Brussels several days ago to discuss the issue. STS's solicitor, Brian Lynch, pointed out that it was "significant" that the commission met the company in the first place.

The loss of the contract would be a significant blow to Bus Éireann, which has been losing business to private-sector rivals and warned recently that it was facing insolvency. Management's proposals to cut costs prompted a three-week strike at the company in April which ended only following Labour Court intervention.

A Bus Éireann spokeswoman said the State and its agencies were dealing with the complaint, so the company itself was not involved. The company has pointed out that about 90 per cent of the services are subcontracted to small and medium-sized private bus operators around the Republic, who tender for the work competitively.

The Court of Appeal ended a three-year legal action against the department by STS in May 2016 when it ruled that the school transport service was not a commercial contract, but an administrative arrangement between two State bodies, and so it did not need to be put out to tender.

Private bus operators’ lobby group, the Coach Tourism and Transport Council, welcomed the news that Brussels was scrutinising the school transport deal.

The council brought a complaint against the scheme, which in 2014 resulted in the European Commission saying that the deal gave Bus Éireann a selective advantage and suggesting that the service could be put out to tender. The commission said it would begin talks with Government on the issue.