What's it all about?
When it comes to figuring out the fares for the future, the National Transport Authority actually starts by looking at the past. Every business in Ireland over the last six years has had to tighten the proverbial belt, and the CIÉ companies (Dublin Bus, Bus Éireann and Iarnród Éireann) have been no exception.
When it comes to the business of belt cinching and penny pinching, CIÉ does, at least, have the luxury of punching an extra hole in its financial leather and asking its passengers to fill in the void. Successive years of budget cuts have been matched by successive years of fare hikes, grossly inflated when compared to the consumer price index. It begs the question: just how fair are these increases?
The NTA has deemed them wholly justifiable, describing them as an essential effort to protect the service of moving people around the country. And the government is backing them up; with the prospect of economic growth this year, Budget 2015 brought with it zero change to the Public Service Obligation (PSO) payments made to CIÉ – so while the money from the public exchequer hasn’t gone up, it also hasn’t been cut. And that’s a first since 2009.
Passing the buck?
So if the government has eased off on reaching for the buckle, why are we, the passengers, getting the belt and enduring another year of rising fares?
Well, while CIÉ's revenue streams haven't dried up, there's definitely been a period of drought. The money reaped from taking the bus or train comes from four channels: PSO payments, Department of Social Protection Free Travel Grants, additional revenue (advertising, etc), and passenger fares. It’s the people waiting at the bus stop and on platforms who provide the biggest chunk of CIÉ’s money, and their demand is tied intrinsically to the fate of the economy.
Since the recession kicked in, those revenues and passengers have taken a beating. CIÉ is banking on a better future, however, and a brighter economic forecast; as growth gives rise to the number of commuters heading off to work and the amount of disposable income in your pocket, the amount of people waiting to board the bus will mean you’ll need to sharpen your elbows to beat the competition to the nice seat at the front of the top deck.
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The past, the present, and the future
The future isn’t the problem, though, it’s the past and the present. Of the four transport companies receiving state funds, two of them currently run at a loss – which the NTA insists is necessary to provide rural services. And only one of the four, the Luas, isn’t weighed down with annual debt repayments made on borrowings to cover losses from previous years.
These burdens, along with fuel increases and the cost of servicing an ageing fleet, are compiled in budgets submitted to the NTA every July. Its challenge lies in working out exactly how much to increase the fare by to accrue the most revenue without discouraging passengers from finding an alternative.
In their own documents, the NTA acknowledges that 2014 has seen revenue increases, and that the projected economic growth will benefit the transport networks. But it justifies increasing passenger fares by saying they’re not as bad as the previous three years, and that one year of growth cannot right five years of losses.
But the positive news is that this should be the last year of feeling the squeeze so significantly over at the National Transport Authority. Speaking to Newstalk today, CEO Gerry Murphy said fare increases from 2016 should fall in line with inflation, and that the days of big increases should be over.
While reading those words might be cold comfort to commuters standing at rainy bus shelters come January 1st, it does suggest, at least for now, that fairer changes are just a few stops away.
