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Martina Devlin: Transport providers are taking the public for ride


Happy New Year. Unless you're a regular public transport user, in which case prepare for a prolonged hangover because a Mickey Finn was slipped into your celebratory drink.

This week, public transport operators raised their fares. Tickets on everything from bus to rail to Dart to Luas had the upwards-only principle applied, even though a price rise was granted to Dart services just 10 months ago.

Maybe you're inclined to wince, then shrug -- new years tend to equal new pressure on incomes. We've been conditioned to expect it. But this is not simply yet another price hike or new bill altogether, such as the household or water charges.

This is a fast one. And we could have been protected from it.

Here's how the price rises happened and why they are wrong. Last month, Public Expenditure Minister Brendan Howlin announced he was cutting the subsidy to CIE by €21m, or 8pc. Unfortunate but unavoidable.

The obvious way to compensate for this reduced subvention is for CIE to absorb the loss, as many retailers are doing with the 2pc VAT rise. It could implement further efficiency initiatives within its three operators, Bus Eireann, Dublin Bus and Iarnrod Eireann -- maybe take another look at rosters or overtime arrangements. Save jobs, that's a priority, but trim pay if necessary.

After all, while a number of CIE employees have taken home slimmer pay packets in recent times, overall the semi-states have escaped relatively lightly compared with the pay cuts imposed on both private and public sectors.

Wait, no need for CIE's top brass to swallow the pill and find themselves dealing with a mutinous -- possibly strike-minded -- workforce. The National Transport Authority had a happier idea. Happier for CIE, I mean. Just four days after Mr Howlin wielded the axe, the NTA gave the green light to a raft of fare increases.

So the subsidy cut hasn't hit. Or to put it another way, it has landed on a different target. Once again the public is taking it on the chin.

Dublin Bus did particularly well with an average 15pc increase. Bus Eireann's fares went up by more than 5pc, while Dart, commuter and Luas services rose by between 6pc and 6.7pc.

No doubt it suits the Government to let the National Transport Authority (NTA) take the flak. It's so much less satisfying to direct anger at a nebulous quango where decisions are made by committee, rather than at a Transport Minister.

But let's consider this transport authority for a moment. It was set up two years ago as an independent regulator; independent of government, independent of the transport operators. So far so good. Except its Usain Bolt-style sprint to protect CIE doesn't promote an image of independence, does it?

Perhaps you think I'm being hard in accusing the NTA of safeguarding CIE. But the NTA 'fesses up on its own website, acknowledging cause and effect where it says the fare increases "follow from the reduction in funds available to subsidise public transport announced in the Dail".

At a time of unprecedented focus on expenditure, in the midst of an austerity programme, the case for any increase has to be extremely persuasive. It has not been made adequately in this case.

Didn't it occur to the NTA to tell the transport providers to take on some or even all of the revenue loss? Why pass the parcel to Joe Public?

In the case of monopolies (and CIE is all but one, especially its rail network), it is in the public interest to have regulation. Otherwise excessive charges might be imposed, and they would not be beneficial to the public and could damage the economy.

Sometimes government regulates -- for example, our Health Minister carries out the function in his sphere. However, the advantage of independent regulators is that they do not face re-election, unlike ministers, so they can make decisions unaffected by the need to court popularity. Their job is to be independent of political and industry interference, "balanced by accountability", according to an Economic Intelligence Unit 2009 report on regulation.

Accountability is key. Decisions must be transparent and their reasons must be compelling. Ascribing the fare rise decision to a lower subvention is not a compelling reason. I see little by way of rigorous balancing of conflicting needs here. Instead, I see something that looks suspiciously like lopsided decision-making.

The public has a right to know what the NTA's objectives were in reaching the conclusion it did. Did it engage in rigorous analysis of data? How did it weigh this data?

Then there is the matter of the CIE management. It could have acknowledged that passing on the subsidy loss to customers was unfair. Especially since higher fares for a deteriorating service hardly incentivises public transport use. CIE could have absorbed the subvention cut, announced it, and reaped a public relations advantage which might have helped with passenger slippage.

And another thing. The infamous Leap card, a pre-pay smartcard whose selling point is cheaper fares, isn't even fully available yet, despite taking a decade to develop and costing taxpayers €48m to bring to this not-quite-ready stage. It can be bought online or at newsagents but not at stations. A hardware problem seemingly. Nor is it available nationally -- greater Dublin only. I don't call that good value for tens of millions of our money.

This so-called investment will take years to recover. Ireland is in no position to underwrite long-term projects with minimal benefits, and any others mid-way through their metamorphosis should be put on ice immediately.

As for the bus and rail price rises, they serve as a reminder of how inimical to the public interest are monopolies. I'm not advocating mass privatisation, where high volume routes are cherry-picked and the less lucrative ones ignored -- leaving people stranded in outlying areas. If public transport needs state bounty, so be it. A vibrant public transport sector is in the national interest.

But I do question this automatic assumption that less support from the Exchequer must equate to steeper fares. With everything there is a tipping point, and passengers may opt increasingly to walk, cycle or car pool instead.

Will CIE respond to that with yet more fare rises?

Irish Independent