NTA RECOMMENDS NO FURTHER TENDERING OF DUBLIN BUS SERVICES (updated)

Under this rather stark headline, the National Transport Authority (NTA) issued a press statement on 2nd October last, giving a little under a month for responses to be received. The NTA was proposing, for reasons set out in a consultation paper  and technical report to award a further five-year monopoly to Dublin Bus.

A decision is due from the NTA Board this month (see item 8).

On its establishment, the NTA’s first act was to award an initial five-year monopoly to Dublin Bus (as well as to Bus Eireann and Irish Rail).  Five years later, which was five years ago, a second almost-complete monopoly was awarded, except that 10% of services were to be tendered for competitively. Bus users will see that these services are just now beginning to be operated by Go-Ahead in certain parts of Dublin.

Now, the NTA proposes to tender no more. Some competition-sympathising acquaintances and I have made a submission to the Authority for its consideration. Here is the executive summary; the Association referred to is a new group, the Competition Advocacy Association (of which more later):

Submission to the public consultation on the NTA proposal to make a third direct award contract to Dublin Bus without a competitive tender.

Executive Summary

This submission argues that the NTA proposal to make a third direct award contract to Dublin Bus is

  • not consistent with current EU and Irish law
  • not consistent with government policy
  • not consistent with the General Economic Interest, and
  • not consistent with the evidence and arguments of the NTA’s own reports published alongside the consultation document, and dated 2 October.

For each and all of these reasons, the Authority has not justified departure from the statutory default position, which requires competitive tendering. Only where there an accumulation of argument and evidence that demonstrates that a departure from competitive tendering is justified would recourse to a direct award be justified. No such justification has been provided in this instance.

In addition, the Association is most concerned at the number of prior assumptions and decisions that appear to have already been made as part of this exercise. Those include a decision to opt for a gross contract but without any elaboration of the implications of that approach from a tendering perspective. Equally, there is no attempt to consider whether it might be possible to construct a basket of routes in respect of which a net contract (which is likely superior from a taxpayer perspective) might be viable. Crucially, such a contract would need to be awarded in compliance with the tendering provisions of Regulation 1370/2007.

Overall, the Association considers that the NTA should not proceed with its direct award proposal. As a result, it should withdraw  its proposal and publish a new proposal that is in line with the law, the government’s policy, the general economic interest. A curious feature of this consultation exercise is that the Technical Report that accompanies the Consultation Paper make the case for competitive tendering in the general economic interest in largely unqualified terms. Despite that, in purported reliance on other considerations (some of which are extraneous and others which present soluble challenges) the Authority fails to hold to the statutory default, which is very much in favour of direct tendering.

The Association believes that a tendering exercise for a further set of bus routes is required, in addition to the 10% or so that have already been made subject to competition, first and foremost to protect the advancement of the general economic interest as required by statute.

Regrettably, the Association considers that the NTA’s present consultation exercise is not in accordance with the Better Regulation principles of the Department of An Taoiseach and has not been undertaken in a way that allows for full engagement by interested parties. Furthermore the Authority has failed to provide elementary information and clarifications in response to a reasoned request from the Association.

Should the NTA consider that there may not now be enough time to reconsider its decision before the current direct award comes to an end in 2019, the NTA could of course make a short extension to the current award (for instance of twelve months). This option is not canvassed as such in the Consultation Paper. This is a very significant failure to consider relevant possibilities and an all the more glaring one considering that under Irish law, the default position is in favour of competitive tendering.

For wonks needing a bigger hit, the full 9,633-word submission is here.

On 22 October, prior to the submission being made, the Competition Advocacy Association wrote to the NTA seeking important relevant information that had not been published as part of the consultation. We were assured by phone of a response, thought not necessarily in advance of the consultation deadline. As of 17 November, no response.

When the Act to establish the Dublin (later National) Transport Authority was proposed in the Dail, the then Minister for Transport made a speech, no doubt meant sincerely, about how the Act would usher in a new era of customer-focused surface transport in Dublin, based on competition.  Indeed. Sean Barrett wrote a sceptical analysis of the Act in the ESR, showing it to be a mild dressing-up of the old legislation, and so it has proven.

* * *

In his speech introducing the statute to the Oireachtas, Minister Dempsey foresaw that the NTA would “consult broadly”. The NTA’s actual policy towards communicating with the public is set out here;  the NTA will inform the general public of its consultation plans “as far as is practicable … usually through this website” and will consider any views received within the consultation period “even if not explicitly solicited”. The NTA carries out its consultations, it says, in the most “cost-efficient manner possible” using its website and will advertise in the press only “where required by law”.

In my view, this is telling language. What the the practical obstacles to placing notices on a website? Why is publicity (advertising) for proposals in advance of decisions so grudging? (Are all those passengers reading their screens on the bus really trawling the NTA website?) Regrettably, the Department of the Taoiseach’s earlier enthusiasm for better regulation including for thorough-going consultation has proven short-lived.

Author: Cathal Guiomard

Cathal Guiomard is a Lecturer in Aviation Management in DCU. Between 2006 and 2014, he was Ireland's Commissioner for Aviation.

1 thought on “NTA RECOMMENDS NO FURTHER TENDERING OF DUBLIN BUS SERVICES (updated)”

  1. Many thanks for highlighting these issues. You and whoever is collaborating with you in the Competition Advocacy Association have made a valuable contribution. (A little more information about the CCA perhaps wouldn’t go amiss.)

    However, I’m surprised that you appear to be so surprised about the farcical nature of sectoral regulation, and in particular any form of economic regulation, in Ireland. It’s not so much that regulation has been captured by regulated bodies, it’s that the regulatory bodies were established as entities fully captured by policy-makers and the firms or entities being regulated. Even when there’s some private sector involvement in a sector, publicly-owned and directed or semi-state bodies tend to dominate the sector. The relevant minister appoints the boards of these publicly-owned or semi-state entities, sets the policy for the sector (which is largely set out by departmental officials with input from the minister’s special advisers who’ll manage the political optics and see what’s required to square the various special interests in the sector), and appoints the regulator or commission of regulators who are required to “regulate” (or, in others words, give what they want to) the regulated entities.

    A veritable mountain of official bullshit was been con fected to put a gloss on all of this. Most of it is relatively easily accessible in the public domain, but most citizens don’t have the time, interest or sufficient knowledge of the functioning of the sectors to dig out evidence of how they’re being exploited by these coalitions of special interests. But it’s all “hidden in broad daylight”. The media are either insufficiently resourced, or too lazy (or compromised) to do the necessary digging and highlighting of abuses on behalf of citizens. And it would be seriously career-limiting, if not career-threatening, if any officials or ordinary employees engaged in these processes were to highlight abuses. These folks can see clearly how whistle-blowers are treated.

    But that doesn’t mean that most ordinary citizens are not aware they’re being ripped off. And occasionally the fully understandable disgust and anger erupts. Official Ireland might sneer at the Brexit fiasco and how it came about,but it is pushing its luck on its own patch.

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