The emergence of serious losses at the Expressway unit of Bus Éireann is a puzzle. At one time, Expressway, the unit which handles long-distance services, was understood to be covering costs without subsidy. The annual CIE accounts do not isolate the Expressway figures, so this was supposition.

However, it began to emerge some years ago that profits on the school bus contract with the Department of Education were being set against losses in a piece of non-transparent accounting. It appears that Expressway losses have now reached €5m per annum and will rise further unless action is taken.

Expressway faces competition from unsubsidised private operators on many routes but had been successful in maintaining market share and avoiding losses until more recent years. This despite the restrictive licensing arrangements which applied, and still apply, to the private operators.

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Urban bus services, and the Bus Éireann local routes that serve smaller rural communities, cannot reasonably be expected to cover costs and receive substantial taxpayer subsidies. But this is true all over Europe and there are reasonable social policy arguments for public subvention.

If Citylink or Kavanaghs can provide service without losing money, why can’t the State-run intercity bus company do the same?

Intercity services are different. There is no public service obligation applying with intercity routes and Expressway is not required to provide any particular service or service frequency. There is no ceiling imposed on fares either. The private operators and Expressway operate in competition but neither appears to enjoy any unfair operational advantages or handicaps.

If Citylink or Kavanaghs can provide service without losing money, why can’t the State-run intercity bus company do the same?

The CIE group as a whole receives substantial operating subsidies to cover losses on both bus and rail services. The company also receives Exchequer capital support for fleet renewal and other capital expenditures. Whether any of this subsidy leaks into the Expressway operation is impossible to tell from the published accounts.

It is reasonable to assume that the private operators have not been incurring heavy and growing losses over a period of years, as appears to be the case with Expressway. They would simply cut services and surrender route licences, or even go out of business. Thus the CIE group is stuck with the ownership of a long-distance bus company unable to break even in a business where its competitors appear able to do so.

Indeed, the long-distance bus business has been growing in popularity with passengers and has been a beneficiary of the road improvements undertaken around the country, especially the motorway network. It is emphatically not the case that Expressway is required to run unprofitable routes, which no private operator would touch, but which are deemed worthy of taxpayer subsidy through the political process.

This is true of the urban bus companies and of rural services but unsubsidised operators are present on many Expressway routes and would enter others if they were afforded the licences needed. On existing competitive routes they would add capacity if Expressway withdrew or cut frequency.

The Government is losing money on an operation for which no public subsidy has ever been voted by Dail Éireann and for which none should be necessary

The Government is losing money on an operation for which no public subsidy has ever been voted by Dail Éireann and for which none should be necessary. The private sector appears able and willing to deliver, often at fares below those charged by Expressway.

So what is going on here? It appears that the cost base, in particular payroll, at Expressway, has simply drifted out of control. There are assertions, impossible to check, that drivers with the private operators are not as well paid as those in CIE, including Expressway, and there may be other cost inefficiencies.

The losses have been in the headlines because of a pay demand from the bus unions, following on awards made earlier this year to drivers of the Luas trams in Dublin and train drivers. If conceded, these pay claims would, according to CIE management, add further to losses.

It is time for Government to face the music at Expressway. If the company were a standalone enterprise it could not entertain the current pay demands and would have long since commenced a rationalisation of its operations. If it disappeared tomorrow, its customers would have immediate alternatives on many of its routes from Irish Rail and from the private bus companies. It may even be the case that private operators would volunteer to operate all of its routes without subsidy.

There are some monopoly businesses operated directly by Government for reasons of social policy, with transparent accounts and visible levels of taxpayer subsidy. There are other sectors left entirely to unsubsidised private competition. The long-distance bus business is an unhappy combination of the two. It was never the intention that this segment of the public transport business be permanently subsidised.

Perhaps it is time to split off Expressway from CIE, publish proper accounts and let the public see what is going on.