Former junior minister backs private bus company's claim that Bus Eireann contract did exist
A FORMER junior minister at the Department of Education has supported a private company's claims that a contract did exist with Bus Eireann for the provision of the school transport system, the Commercial Court heard.
Frank Fahey, Minister of State at Education and Science from 1987 to 1992, whose responsibilities included school transport, said he no reason to think during his term in that office that Bus Eireann was anything other than an independent commercial company providing the student bus service under contract to the Department.
He had also looked at privatising part of the service on a pilot basis in 1988, but there was strong lobbying against this proposal.
Mr Fahey has provided a sworn statement in the ongoing case being brought by a private consortium which has brought a legal challenge against the Minister for Education, with Bus Eireann as a notice party, to the operation of the transport scheme.
Student Transport Scheme Ltd (STSL), claims the Department is awarding the transport contract to Bus Eireann without it going out to contract as required under EU competition directives.
The Minister and Bus Eireann say there is no contract and even if there was they are entitled to avail of a number of exceptions including that the school transport scheme was set up long before the EU directives came into force.
STSL, who say the transport scheme costs €162m to operate, involves a large number of Irish bus operators as well as major US school transport operator Trailways.
It also involves largest manufacturer of school buses in America, IC Bus Corporation. This company wants to establish a base in Ireland to build buses, trucks and other vehicles for export throughout Europe which will create up to 6,000 direct and indirect jobs, according to STSL.
On the second day of the action yesterday, Anthony Collins SC, for STSL, read from former Minister Fahey's affidavit in which he said Bus Eireann provided, under contract with the Department, the school transport scheme along with other ancillary services.
Mr Fahey said he had no reason to think that it was ever different, before or since his term as a Minister, that the contract with Bus Eireann was "done on a yearly basis".
He said it was considered, during his time in the Department and probably since, that there was "no one else capable" of providing the service and there was not much choice (about it), so it was renewed each year with Bus Eireann.
In this sense, the renewal was automatic but he was nevertheless aware "we could decide to renew the contract or not renew it" for each school year.
On this basis, in 1988, his Department decided not to renew part of the contract and privatise the service for four counties under a pilot
scheme. The pilot was deferred however for a year, Mr Fahey said,
but what they were doing was looking at ways to vary the system and save money.
Plans were also put in place by the Department for the VECs in those four counties to supervise the operation of the scheme and put it out to public tender.
"When we tried to change things, Bus Eireann were very independent in their objection and lobbied in trying to keep the contract", Mr Fahey said.
Then Labour Deputy, now President, Michael D. Higgins, spoke out in the Dail about the decision to "withdraw the contract for school transport froom Bus Eireann" on a pilot basis in the four counties, Mr Fahey said.
The junior minister argued at the time there was no reason why Bus Eireann should allow any of its drivers to become redundant if it was capable of competing in the open market.
Mr Fahey also stated that the day-to-day operation of the school transport scheme is carried out by Bus Eireann as an agent for the Minister.
The hearing before Mr Justice Brian McGovern continues.