EU Commission investigating use of €150m in State aid by Bus Éireann

The European Commission is investigating claims that Bus Éireann is using some of the €150 million it receives for the school transport scheme to subsidise commercial services.

Since 2007, the commission’s competition directorate has been investigating claims made by private-sector rivals that State aid given to CIÉ subsidiaries, Bus Éireann and Dublin Bus, contravenes EU law.

The Brussels-based directorate has recently broadened its inquiry to take on board allegations that Bus Éireann is using some of the €150 million a year paid to it by the Department of Education for the school transport scheme to subsidise other services.

A spokeswoman for the competition directorate yesterday confirmed that the overall investigation into the State aid claims is ongoing. She said the office was aware of a recent unsuccessful High Court challenge to the operation of the school bus scheme brought by a potential rival to Bus Éireann, Student Transport Scheme.

However, she said that the office could not comment beyond that as the investigation was still under way.

In a statement, Bus Éireann said “there is no cross-subsidisation from the school transport scheme to commercial road passenger services in Bus Éireann”. It said such services were purely commercial and received no State funding.

Its statement said it kept separate accounts for its school transport service, which were independently audited.

The Department of Education paid Bus Éireann €152 million last year to provide the service. The State-owned company operates the scheme but contracts out many of the routes to private operators which provide the actual services.

Last month, the High Court rejected a challenge brought by multinational-backed STS, which argued that it was a commercial contract and should be put out to tender in line with EU law.

However, Mr Justice Brian McGovern ruled that the relationship between Bus Éireann and the department was not a contract and had none of the characteristics of a normal commercial arrangement.

It is understood that STS is considering an appeal.