Sir - Competition is good for the consumer as we know from our experience of liberalisation in the aviation and telecommunications industries. In both cases the ending of state monopolies brought new players into the market, offering new services and lower prices. In both cases the former monopolies responded by offering new services and lower prices, thus securing great benefits for air travellers and telecom users.
The question now is how can we secure the same kind of benefits for bus users. Deregulation is not the answer. The experience in Britain shows that complete deregulation has not been a great success. After an initial surge of competition, the market gradually settled down and predatory pricing forced the smaller players out. Economies of scale allowed the larger players to dominate over time. What tended to happen eventually was that a public monopoly had been replaced by a private monopoly. Fares went up, wages went down and passenger numbers declined.
But ruling out deregulation does not mean ruling out competition. The Progressive Democrats have produced a number of policy documents on public transport over the last three years, the most recent of which was published last month. In that document we set out a clear and workable model as to how competition could be introduced into the Irish bus market in a way that would deliver real benefits to consumers.
This model is based on the establishment of a Public Transport Authority to act as regulator, network designer and licensing authority for the whole sector, and the issuing of licenses through competitive tendering for particular bus routes or particular areas for set franchise periods.
The tendering process would be open to independent operators and to the CIE companies. Licenses would be awarded on the basis of service levels and efficient performance, including the efficient use of available public transport subsidies.
This approach - what might be termed re-regulation rather than deregulation - would offer real benefits to consumers. It would bring new operators and new investment into the market. It would facilitate the opening up of new routes and the development of new services. And it would bring a real customer focus to public transport in Ireland.
I have no doubt that both Bus Eireann and Dublin Bus would be able to survive and thrive in a new competitive environment. I do not believe that either company, however, can achieve its full potential within the current structures of CIE.
Both State bus companies should be established as autonomous companies in their own right. The concept of employee ownership should be actively pursued in consultation with the unions. The option of privatisation should be explored if the staff and the State want to unlock the very substantial real estate value embedded in the two companies.
I favour the State re-investing a substantial part of any privatisation proceeds in the staff pension funds to enable people to enjoy a reasonable standard of living in retirement.
The situation on the railways is more complex and the scope for competition is not as obvious. Certainly Iarnrod Eireann has to be established as a separate company in its own right. It needs to have separate and distinct business units - one to manage and develop the rail infrastructure, and the other to manage rail services to the highest standards of efficiency and effectiveness. The Public Transport Authority should be mandated to exploit the public-private partnership mechanism to the full to accelerate the development of new rail projects as quickly as possible.
For years we have failed to face up to the need for reform and re-regulation in the Irish public transport sector and we have suffered the consequences. A modern and dynamic society needs a modern and dynamic public transport system. There is absolutely no reason why Ireland should lag behind the rest of Europe in this regard. - Yours, etc., Senator Helen Keogh,
Transport Spokesperson, Progressive Democrats, Kildare Street, Dublin 2.