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Bus story March 3, 2017

Posted by WorldbyStorm in Uncategorized.
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Stephen Kinsella in the SBP writes about Bus Éireann, and takes it as a matter of ‘public policy’. He argues that:

Competition from private long-haul bus companies has forced the profit-making inter-city routes to fail, and the company to lose stacks of money. Its own CE has raised the prospect of outright closure. The solution in the short-run is to cut back costs – French for reducing wages and letting people go – and borrow to return the company to validity. But that isn’t happening. In a private company, this would learnedly happened But this isn’t a private company.

And he continues:

It is true to say act the company is caught between two large problems.

The first is its pay bill, which grew too quickly relative to revenues in the boom and which hasn’t come down fast enough to save the company’s bottom line. The second is the dual nature of its role.

Were it simply a part of the state like the DPP… BÉ could lose money all day and few people would mind, especially if it were fulfilling its public service mandate to bring citizens from places private bus companies wouldn’t take them. When competing with private companies with newer buses and cheaper staff, BÉ gets hammered. As it should. Its services are just not up to par.

And he says that while:

The taxpayer would say let BÉ fail but save the routes. Let other companies bid for them en bloc and have some geographical tendering process, so bus companies in (say) the mid-west fulfilled the public service obligation in that area. In the end the state will pay to plug the gap the market won’t. It may even pay more.

And his conclusion?

I would let BÉ go. It’s 2,487 workers will find work elsewhere in a growing economy, perhaps at higher wages and with better conditions.

Really?

And…

There is enough demand for these skills elsewhere in the economy.

But he’s just spent a couple of paragraphs arguing that the pay bill is too great and that private operators wouldn’t pay such rates or offer such conditions. I’m not sure how he squares that circle.

And what of the public service obligation?

Its functions can be transferred to other companies.

Really? That simple?

Sure, he offers a cosmetic argument at the start of his piece arguing that nationalised entities can be cheaper and more effective. But the drift of his piece is telling when one looks at the following:

‘Will the government getting involved push out private involvement?’

But surely this more a case where a state run enterprise hollowed out by ‘competition’?

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Comments»

1. RosencrantzisDead - March 3, 2017

perhaps with higher wages and better conditions

Perhaps the 2487 workers will each find a unicorn and they will all make loads of money charging people to pet them and ride on their back.

#shitliberalsthink

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2. CMK - March 3, 2017

Drivers for private bus companies on the same routes are on a little over minimum wage. 25K a year would be a good salary. Couple that with zero hours and ‘as and when’ contracts and that 25k recedes into the distance. Kinsella is talking rubbish.

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3. deiseach - March 3, 2017

Grr. Reading that reminded me of your average Economist article. Correctly analyse an example of market failure then . . . advocate leaving it to the markets anyway. Cultists the lot of them.

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4. FergusD - March 3, 2017

Maybe they should look at the UK where deregulation, and now council buses, meant many rural areas are now without any bus services. But hey ho, who needs evidence it is obvious the private sector is best.

Liked by 1 person

rockroots - March 3, 2017

That’s got to be a real concern though, or it should be anyway. For a government that set itself the goal of rural regeneration and rebalance, allowing unprofitable rural routes to vanish with just a shrug of the shoulders is not going to fly. This really would be a devastating cut for a lot of people, and it will especially hurt the core voters of FF, plus the IA and the rural TDs that are propping up this government.

Liked by 1 person

5. irishelectionliterature - March 3, 2017

Thats it, Privatise the lot. Give subventions for uneconomic routes etc etc…… two years time subventions are not enough we’re going to close the routes!

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6. GW - March 3, 2017

Private transport (cars) kills and maims in many ways and is incredibly wasteful. Regardless of whether it is fossil fuel driven or electric, driverless or not.

Public transport, walking and cycling are the only options for a sustainable transport system.

Sure let it be as efficient as tranparently managed as possible, but it’s an essential public service and should be fully under public control and ownership, with workers paid decently and having a say in the running of the service, along with users.

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