Bus Éireann to get extra €7m from State for free travel scheme

Move will bring payments into line with private sector rivals

Bus Éireann will ringfence the extra cash for its Expressway service, which faces most competitive pressure from private sector players. Photograph: Aidan Crawley

State-owned Bus Éireann will earn up to an extra €7 million in income next year after the Government agreed to increase payments for pensioners’ free travel to the company.

The transport company has been arguing for several years that its private-sector competitors get about 70 per cent of the average fare from the Government for carrying passengers entitled to free travel, while Bus Éireann was receiving just 37 per cent.

The Department of Social Protection has agreed to increase the payments to Bus Éireann for providing the free travel service to bring it into line with the sums given to its rivals.

The move will increase the company’s revenue by an estimated €6 million to €7 million a year.

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Bus Éireann will ringfence the extra cash for its Expressway service, which faces most competitive pressure from private sector players.

The State company has been asking the Government to bridge the gap between it and its rivals for some time.

Its chief executive, Ray Hernan, raised the issue at a recent conference, saying that it was a "major bugbear" for the company.

Free travel

Pensioners and other groups are entitled to free travel on public transport services in the Republic with the Government making payments to various transport companies to pay for the service.

Bus Éireann receives less than competitors because the formula used to calculate the payments due to the company was agreed about 40 years ago and is out of date.

News that the department has agreed to increase the free travel payments follows Bus Éireann’s implementation of the final elements of a restructuring plan.

Earlier this month, the company introduced new rosters and composite pay rates intended to aid it in cutting a €15 million bill for overtime and premium payments that Bus Éireann said it could no longer afford.

Various local practices grew up within the company under which many senior drivers did not work weekends, even though Bus Éireann is a seven-day-a-week service.

The new rosters also mean drivers will drive for seven hours of a nine-hour day, as opposed to four as they did in the past.

Voluntary redundancy

About 240 staff are taking voluntary redundancy from the company as part of an overhaul of the business agreed with unions earlier this year.

The changes were agreed with the Labour Court following a three-week strike in the spring. Between the industrial action and the cancellation of services for Storm Ophelia, the company lost 22 days of service.

It has budgeted for a loss of €13 million this year, but recently forecast that it would make profit of €3.5 million in 2018.

However, this forecast pre-dated the Government’s decision to increase the free travel subsidy to the company.

Bus Éireann is also expanding city services in Cork, Galway and Limerick, where demand is growing.

It recently won a National Transport Authority contract to operate five Waterford city bus routes against competition from the private sector.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas