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Public Service Obligation Contracts

Each year funding is provided for socially necessary public transport services in Ireland.  Iarnród Éireann and a number of bus companies provide these services, known as Public Service Obligation (PSO) services, under contract to the National Transport Authority.  

Light rail services are provided under contract to Transport Infrastructure Ireland. The funding of PSO services is governed by Public Transport Contracts between the Authority and these companies.   

There are two types of PSO contracts, that can be either awarded directly or competitively tendered for. They are:

  • Net cost contracts under which the operator retains all fare revenue. The Authority contracts with Dublin Bus, Bus Éireann and Iarnród Éireann fall into this category.
  • Gross cost contracts under which the Authority retains all fare revenue. All competitively tendered contracts currently fall into this category.

The contracts meet the current criteria set down in EU law. The contracts set strict standards of operational performance and customer service, and contain penalties for non-performance.

The National Transport Authority monitors the contracted performance of each PSO operator on a quarterly basis.


Direct Award of Public Service Obligation Contracts for Bus Services in 2019

In November 2018, the National Transport Authority decided to:

  • Directly award a new contract for the provision of public bus services, in the Dublin Area (from December 2019), to Dublin Bus for a period of five years.
  • Directly award a new contract for the provision of public bus services, outside the Dublin Area, to Bus Éireann for a period of five years. This excludes a selection of services where the Direct Award contract will be for a period of two years.
  • Remove approximately 5% of services from the Bus Éireann Direct Award contract in 2021, and organise a tender competition for the provision of these selected services. 

The list of bus services included in the Dublin Bus Direct Award contract (December 2019).

The list of bus services included in the Bus Éireann Direct Award contract (December 2019).

The list of bus services to be removed from the Bus Éireann direct award contract in 2021 and competitively tendered.

The services in the Direct Award contract can be amended by the Authority at any time and these changes are not restricted by this decision. 

The Authority is duty-bound to publish a report where it proposes to enter into a Direct Award contract for the provision of public bus passenger services. 

The report on the 2019 Direct Award contract:

The draft proposals for the 2019 Direct Award contract:


Direct Award of Public Service Contract for Public Passenger Transport Services by Rail in 2019

The NTA is proposing, in accordance with Regulations 1370/2007 and 2338/2016 and applicable national legislation, to directly award a public service contract to Irish Rail for the provision of public passenger transport services by rail.

This has a commencement date of 1 December 2019, following the expiry of the current Direct Award contract on 30 November 2019. It is anticipated that the Direct Award contract will be for ten years from 1 December 2019. 

The routes contained in the proposed Direct Award contract are set out in detail here.

 

Legal Basis for Public Service Obligation Contracts

In 2007 EC Regulation 1370/2007 on public passenger transport services by rail and by road was adopted.  EC Regulation 1370/2007 creates a framework for regulating how Member States award exclusive rights and pay compensation for services deemed to be Public Service Obligations (PSO).

The purpose of the Regulation is to ensure transparency in the award of subvention for public transport services by requiring all PSO transport services to be subject to contracts.

In preparation for EC Regulation 1370/2007 Ireland progressed legislation in two stages, the first involving the enactment of the Dublin Transport Authority Act 2008 and the second involving the Public Transport Regulation Act 2009 (as amended in 2016).