A private bus operator challenged CIE/Bus Eireann's monopoly of the State's bus services yesterday in the High Court and claimed the semi-State companies had attempted to put it out of business.
Mr Harry Whelehan SC, for Nestor Bus Ltd of Galway, said gardai had "hassled" the company at the behest of Bus Eireann; that passengers had not been asked to pay fares on CIE/Bus Eireann services operated parallel to the Nestor company's routes; and that successive ministers for transport had acted with CIE/Bus Eireann to operate a "closed shop".
Mr Whelehan said successive governments had failed to comply with EU competition rules by not opening up the transport market. The Nestor Bus company of Coolarne Road, Turloughmore, Galway, is suing CIE/Bus Eireann and the State. The case is expected to last several weeks. Mr Whelehan said they were seeking declarations that there had been breaches of EU regulations, the Constitution and Irish legislation.
His clients were also asking the court to declare invalid contracts which CIE/Bus Eireann had with certain private bus operators to ply services on routes which CIE/Bus Eireann did not want to or were not able to provide. These contracts restricted the activities of the private operators.
Nestor Bus also wanted an injunction which would prevent the State and CIE/Bus Eireann continuing the regime which had operated from 1985 and an injunction to stop the Transport Minister from abnegating her responsibility in considering applications for licences.
Mr Whelehan said the company operated a service between Galway and Dublin without a transport licence as required under the Transport Act of 1932. But it was using a device which had been found acceptable to the courts, whereby the company formed a club and had between 5,000 and 6,000 members who paid a fee and joined the bus on fixed journeys between the two cities.
The 1932 Act gave a transport minister absolute discretion to grant or refuse a licence. The practice, when a private operator applied for a licence, was for the Minister to consult CIE to see how they felt. Invariably, CIE claimed the route to be adequately provided for and the Minister refused licences.
Had Nestor got a licence, it would have been entitled to a rebate on the tax due on hydrocarbon oil used to fuel the buses - which was a significant cost in the operations of any bus company. It was also deprived of recompense in respect of any person who got on a Nestor bus and was entitled to free travel
CIE/Bus Eireann, said Mr Whelehan, received significant subsidies; a rebate on hydrocarbon oil; capital investment in relation to their fleet; their losses were underwritten by the State; they had the exclusive right to provide and tender for school bus services and received about £2.5 million per month as a grant for providing free transport to those entitled to free travel.
"In a sense, what can only be described as a closed shop operates to the extent that CIE/Bus Eireann are acting in concert with the Minister to exclude all other players" said Mr Whelehan.
Mr Patrick Nestor and his wife, directors of the company, along with 12 employees, were trying to do business against a very large monolithic public company which was heavily subsidised. They had spent the last 15 years fending off initially mean-minded prosecutions which were promoted by CIE/Bus Eireann in an attempt to undermine the club system.
The hearing continues.