The next item is a discussion with representatives of Citylink, Galway. I draw attention to the fact that while members of the committee have absolute privilege, this privilege does not apply to witnesses appearing before the committee. Members are also reminded of long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House, or an official by name or in such a way as to make him or her identifiable. Members are also remind that civil servants, while giving evidence to a committee, may not question or express an opinion on Government policy or produce or send to a committee any document in which a civil servant, member of the Defence Forces or member of the Garda questions or expresses an opinion on the merits of Government policy or policy objectives.

I welcome Mr. Jaspal Singh, chief executive officer, and Ms Cathy Cullen, managing director, Citylink. I also welcome Mr. John Weafer, principal officer, and Ms Clare Smith, assistant principal officer, Department of Transport. The meeting will conclude at 7 p.m. and, therefore, I propose that the Citylink representatives make a brief statement before handing over to Deputy Connaughton who requested their appearance.

On a point of order, is it appropriate that the committee would discuss anything with a company against which a Garda investigation is pending regarding a licence? Tomorrow our select committee will process legislation to address the 1932 Act under which this chaos and nonsense over licensing has occurred. The Department of Transport has made a complaint against Citylink to the Garda. Is the Chairman not setting a bad precedent for the way we do our business by meeting witnesses against whom a Garda compliant has been made?

We may assist the Garda by teasing out the issues. I ask Mr. Singh to proceed.

I thank the committee for inviting us to speak on behalf of Irish Citylink Comfort DelGro Limited and for the opportunity to discuss and answer any questions the committee may have regarding our operations in Ireland. Some background would be useful.

We do not want any background. I apologise for keeping Mr. Singh until now but we only have a brief time and I ask him to deal with the issue of Citylink operating a service for which it does not have a licence.

We believe that we have a licence and we are licensed to operate the service. The direct service we operate is a variation of our licence. We would like to explain why we believe that.

I will ask Deputy Connaughton to make his contribution before Mr. Singh gives his explanation.

Personnel from the Department of Transport are present. Mr. Singh does not have a licence for a direct service between Galway and Dublin using the new motorway. Citylink received letters from the Department on 2 October and 5 October instructing the company to cease operation of the unlicensed services immediately. Did Citylink get that letter?

I believe we did.

Did Citylink get it or not?

Yes, we did.

Why would the Department write such a letter if Mr. Singh believed Citylink had a licence?

We have the licence and——

Why would the Department write a letter to Mr. Singh?

I do not know. The Deputy will have to ask the departmental officials that question.

Will Mr. Weafer answer why the letter was written?

The licences Citylink hold are for multi-stop services on this route. It does not hold a licence for a direct service.

What does a multi-stop service mean?

Citylink must stop at locations along the route. When we made our submission, we copied the licences to the committee and any reference to those licences will show the stops on that route. As far as we are concerned, the situation is that if Citylink operates a service which does not incorporate those licences and which does not depart at the time set out by the licences, there is no licence covering such services.

Do those services use the old road?

Yes, and that is why we referred this matter to the Garda.

Has GoBus a licence for the direct service between Galway and Dublin?

Yes.

Is the company entitled to be on that route because of that?

Yes.

Has Bus Éireann a licence for the direct route?

No. Bus Éireann is not subject to the 1932 Act and it does not have licences. The company operates two services on this route — route 20, which dates back 20 years or so, which has approximately 15 stops, similar to the licensed Citylink service; and route 20X, which has three stops — Loughrea, Ballinasloe and Athlone — and uses the motorway from there to Dublin. We have authorised 20 departures but Bus Éireann only operates three because its officials' view was the authorisation we gave them was unbalanced and, therefore, they did not introduce them. We also have current applications from them for additional services on that route. In our submission to the committee, we pointed out that certain of their departures were not authorised because we felt they were in direct competition with an existing service.

Have Mr. Singh and Ms Cullen respect for the rule of law?

Certainly we do.

Why then would Mr. Singh operate a bus service without a permit?

I would like to explain. We have a licence and this is the point of difference where I disagree with——

There is no point of difference——

Will the Deputy allow Mr. Singh to answer and explain?

Our licence allows us to operate services between Galway and Dublin and we operate those services totally in accordance with the licence. Our schedule shows the services we operate and they operate faithfully to the licence. What we have done is operate direct services between Galway and Dublin and the licence does not say one cannot operate a service which does not stop. It says one can stop on the way and we are doing that faithfully as per the licence. We see it as a privilege of being able to stop en route and pick up passengers and serve them. That is our right. If we choose to serve the same passengers who want to travel between Galway and Dublin and who do not want to get on and off at intermediate points, we feel we should be allowed to operate those services as well because the licence says one can operate between Galway and Dublin and vice versa.

Was Citylink formed following an amalgamation of Stagecoach?

Yes.

Was that company involved in the bus wars in England and Scotland?

No, we were not involved in the bus wars in England——

Was the company not involved in the bus war in Preston?

We were not involved in Preston.

Was anyone belonging to Mr. Singh's company or an associated company involved?

We have a joint venture with Stagecoach, which is confined to a company called Scottish Citylink that operates in Scotland and runs intercity coach services in Scotland. It is a 65%-35% venture between my company, Comfort DelGro Corporation Limited, the parent company, and the Stagecoach group. That company has nothing whatsoever to do with the issues in Preston or anywhere else in England.

Is it true Mr. Singh's company was referred to the competition authority in the UK by the Office of Fair Trading following a large report published recently because it and the other three major operators in the UK are behaving in monopolistic ways? Is it not the case the company is the second largest land transport operator in the world? It is the market leader in Singapore and it is city leader in a host of cities elsewhere in China and Asia. Is it not the case that Citylink understands well from its experience in other markets what a licence covers and how it applies? Is it not the case that because it is aware the licensing system in this country is 80 years out of date, having been designed in the era of the bicycle and the horse, it is driving a coach and four through the legislation? However, we will have new legislation very shortly. Is it not the case that Citylink knows it does not have a licence for what it is doing or proposing?

It is good that delegates from Citylink are here to answer questions. Is it new information to them that, as Mr. Weafer said, their licence does not allow for a direct service between Galway and Dublin?

No, it is not new information. The Department of Transport has made that point to us but we want to meet it to explain why we are doing what we are doing

I will take a bus to Galway tomorrow and must decide whether to travel with Citylink or GoBus. I understand the charge being made is that Citylink is contravening the terms of its licence, which makes me wonder whether I would be insured as a passenger. Are Citylink passengers insured in cases where it offers a direct service between Galway and Dublin in contravention of the terms of its licence?

We do not believe we are contravening the terms of the licence. I believe we are insured because the services are being operated by a private contractor, Callinan Coaches, which is insured as a public carriage transport operator.

It is only in the event of an accident that we will ever really know whether we are properly insured. We will only find out when a claim is being processed. Has the matter been checked?

Yes, we have checked. It is my understanding that the contractor, not the operator, is the person who will be responsible or liable in the event of an accident. In London, for example, we operate Metroline bus company which is contracted to London Buses TfL. We are the contractor and liable in the event of an accident involving one of those buses.

Mr. Singh has just heard Mr. Weafer say Citylink does not have a licence to operate on the Dublin-Galway route, but I understand GoBus does have a licence. It had to wait two years for that licence to come through, which is a poor reflection on the State. The Department of Transport has stated Citylink does not have a licence to operate the service. Does Citylink intend to defy the Department by continuing with the service? Does it accept that in so doing it is involved in unfair competition? I understand, for example, that it operates ten services at the same times as Bus Éireann services leave Galway but that they must stop on the old road. We all want competition, which is why we are introducing the legislation, but we want regulated competition, not a situation where people decide to take the law into their own hands. We recognise the good service Citylink provides here and that it provides good and welcome competition. However, we do not accept it has a licence to operate on the Galway-Dublin route. Therefore, as Deputy Connaughton said, it must stop operating on this route until it receives a licence. It would not be unreasonable to expect the Department to allow some of the services Citylink operates currently that stop in all towns to switch and take the direct motorway route. However, Citylink must stop operating on the route without a licence. It cannot defy everybody. That is not acceptable.

I wish to add a further comment. Mr. Weafer has said GoBus has a licence, which I do not dispute. However, he has omitted to say GoBus provided those services for at least six months without a licence and no action was taken against it.

We can obtain clarification on that point but two wrongs do not make a right. Will Mr. Singh respond on the point that Citylink is engaging in unfair competition and involved in predatory pricing by offering fares of €1 per trip? While we want low prices for passengers travelling from Dublin to Galway, we do not want a situation where one company tries to drive everybody else off the route. That was the experience in Scotland where Mr. Singh's company was involved. I have particulars in front of me of what happened there and we will not allow it to happen here.

In Scotland the competition commission found that we were not driving everybody out of business but that the measure was anti-competitive between Stagecoach, Megabus and Scottish Citylink Coaches Limited, SCCL. I do not want to waste the committee's time by going into the details.

Will Mr. Singh answer my question about the service and whether he intends to cancel it?

It is not our intention to drive anybody out of business. We have been competing on the route against Bus Éireann and GoBus and on all our other routes in Ireland against Bus Éireann and other companies. It is not our intention to drive any of those companies out of business. All we want is to be given a chance to compete fairly and on an equal basis. On the issue of predatory pricing, our pricing is not predatory.

Is a fare of €1 from Galway to Dublin not predatory?

There is only a limited number of seats at that price. One cannot run a service ——-

I passed the Citylink bus on the road yesterday morning.

If Citylink sold all its seats at €1, it would go bust. It could not possibly do so, as the Deputy knows as well as I do.

I doubt that is a concern. The problem is that Citylink wants everyone else to go bust.

This is yield pricing. Let us take Ryanair, Easyjet and Megabus as examples. It is a very common practice for them to offer a limited number of services at very low prices.

I will ask Mr. Weafer to clarify the matter for us. However, how many €1 fares does Citylink offer on its other route?

I would rather not discuss that matter because it is commercially sensitive.

None.

I have taken the Citylink service on a number of occasions recently. I asked for the €1 fare but was told it was not available.

Exactly.

That is on the old route.

There is no €1 fare on offer on the old route.

Does the Deputy mean on the multi-stop route?

I think Mr. Singh understands well what I am saying. Citylink does not offer a €1 fare on the old route. That fare only applies on the route for which it does not have a permit. It is a premeditated effort to get Bus Éireann and GoBus off the road.

Let me answer the question on the €1 special fare. It is available on all routes; it is not confined to any direct or multi-stop route. It is available on our Cork, Shannon and Clifden services.

How many passengers can travel for €1?

That is commercially sensitive information.

The company could be accused of wrongful advertising if it is not prepared to state how many. In the past few weeks many attempted to avail of the €1 fare on the old service but were told there was no such ticket.

I would like to provide evidence to show the €1 fare is available and that such seats are being booked on a daily basis.

Let me ask another question. I address this question to both Mr. Weafer and Mr. Singh. What is the position on the Garda inquiry? Have gardaí spoken to Citylink?

While we have spoken to a garda in Galway, we have asked to speak with the inspector there.

We will put it the other way. Did the Garda contact Citylink in investigating a breaking of the law?

No; the Garda has not contacted us.

We did speak to a ——

The Garda has not contacted us. We have received no correspondence from it.

I have not seen any correspondence from the Garda.

This is being recorded. What Citylink is stating is that it went to the Garda, but that the Garda did not contact it.

Yes.

I ask Mr. Weafer to confirm the points being made by Mr.Singh on whether his company is being unfairly treated compared with other companies.

I will make a number of points about the operation of the service. Our understanding is that the Garda Síochána has applied for summonses in respect of its operation. Second, all licences granted under the 1932 Act have conditions attached, one of which is that the operator must comply with the terms set out in the appendix to the Act to do with route schedule and frequency. Third, the Department has received an application from CityLink in respect of this unlicensed service which is separate from the services which have been licensed.

With regard to GoBus, I am slightly constrained because it is a separate service provided by a separate company. The Department became aware that the GoBus operation had commenced without a licence but we became aware of this fact following the making of the offer. We had offered GoBus a licence. We decided subsequently that we would grant a licence because we had committed ourselves to the granting of a licence. However, we informed the operator that it had been operating unlicensed services and that we would refer to the Garda any evidence of the continued operation of services not subject to the licence. As stated in the GoBus submission, we did not approve all of the services included in the GoBus application. The Department's files clearly show we became aware of this fact following the making of the offer. Therefore, we considered at the time that we had made an offer and that we had a commitment to pursue it. However, we have informed the company of our views, both in writing and at a meeting.

Is it possible to say how long it will be before the Department will decide on the application from CityLink for a licence for the direct service?

CityLink had made a prior application in respect of the provision of more than 1,700 services on this route.

A total of 1,700 every week.

With a bus leaving every five minutes from Galway to Dublin and Dublin Airport with services to be duplicated in Athlone and mirroring the service from Dublin and Dublin Airport.

Mr. Singh seems to be prepared to ignore all proper procedures and legal approaches to the operation of his business. Does he intend to continue with this illegal service, given what the committee has just heard from Mr. Weafer?

As I said, we do not believe the service is illegal——

Did Mr. Singh listen to what Mr. Weafer said?

I heard what he said.

I remind Mr. Singh that his company does not have a licence; therefore, it cannot operate the service.

That is precisely my point; we do have a licence and are operating——

The company simply does not have a licence.

It has a licence for the service on the old route, to which a number of conditions are attached, whereby the bus must stop in towns along the route. I remind Mr. Singh his company does not have a licence to make 14 trips a day, to leave Galway at the same times as the Bus Éireann buses which have to stop in various towns along the route. This is an illegal operation and amounts to very unfair competition with Bus Éireann. I am not here to stick up for Bus Éireann but it is very unfair competition, as Bus Éireann must operate legally within the terms of its licence. What is to stop Bus Éireann providing bus services leaving five minutes before Mr. Singh's buses and having a free-for-all?

I am not here to speak on behalf of Bus Éireann; therefore, I cannot answer the question on what Bus Éireann will do.

Therefore, how can Mr. Singh claim to the committee that he is not operating illegally, considering what the regulator, the department official, said?

We have made various attempts to explain to the regulator why we believe we are not operating outside the terms of our licence.

I say to Mr. Singh that he is operating 14 services a day on the direct route.

Yes.

He has no licence to operate that service. His company has applied for one but has not yet been given it. His company is operating against GoBus which has a licence and against Bus Éireann whose service leaves at the same time from Galway but which stops in all the towns along the route. If I want to take a bus, I will certainly choose the direct route, even though many do not realise it is an illegal service. Does Mr. Singh intend to continue this illegal activity?

As I said, we do not believe we are operating illegally.

I wish to ask a question because this exchange is going nowhere. If due legal process brings Mr. Singh's company to court and it is found guilty on this issue, will it then stop the service?

Of course, if the court finds me guilty and orders me to stop it. We believe in following the laws of the country.

In my view, the company does not do that.

We fully respect the laws of the country.

I regard this as a very poor development.

Ours is a law-abiding company and we will follow the law. If a court orders us to stop operating, we will do so. It is our belief, however, that we are not operating outside the terms of our licence; we are meeting a demand. We are carrying passengers who want to take the direct route. A motorway has been built at tremendous public expense and we want to give the public what it wants, a direct service.

That service has to be legal. I have a question for Mr. Weafer. From the point of view of the Department, what are the penalties, as they stand, for a company which is obviously breaking the law?

The maximum fine is €65, a daily fine of €6.

That is the reason the service is continuing.

That is quite obvious.

Would the Deputy prefer if the company did not operate in Ireland?

We did not say that; the Chairman dealt with that point directly. I know several people who are customers of Mr. Singh's company. It is a good one which provides a good service but Mr. Singh cannot do what he is doing. He must commit to the standards in place and the rule of law.

The Department has been most anxious to ensure Citylink is a force to be reckoned with. I am aware that the Citylink service on the Galway to Limerick route was removed and that Citylink was given an alternative licence to reinstate the service and continue its operation.

The Chairman has raised a very valuable point. We were given a licence to operate on the Limerick route after four years. Ours is a Singapore-based company and we are committed to operating in this country, including that service. We started a service in January 2007 which we operated at a loss until October 2008. In that month we took the decision to stop the service because it was a drain on our resources. The Department came to us in double-quick time and asked us to reinstate the service because people wanted it. We agreed to its request to reinstate the service in January this year but to this day we are still losing money on it.

On a point of clarification, CityLink wrote to the Department to advise it that it was withdrawing the Cork to Galway service on the grounds of anti-competitive behaviour. We approached the company on the basis that we would investigate this behaviour. We asked it if it would be prepared to reinstate the service. We did not specifically ask it to reinstate it, rather we said we would investigate the allegations of anti-competitive behaviour. I can provide a record of this exchange for the committee, if needed.

I apologise for my late arrival, as I was speaking in the House. I live in the adjoining constituency and I am very familiar with the practices of Citylink. We all recognise the benefits Citylink has brought to Ireland as is generally the case with competition. We all accept that competition is good. In the latter part of the discussion, it was suggested that Citylink pulled that route because it felt there was a level of anti-competitive behaviour. How did it decide there was anti-competitive behaviour? Against what legislative backdrop did it establish that?

I will ask Ms Cullen to answer because I was not involved in it.

It was suggested there was anti-competitive behaviour. I presume Citylink identified a particular statute. I ask Ms Cullen to state which statute.

Is the Deputy asking about the Galway to Limerick to Cork route?

Yes.

The anti-competitive practice was that additional services were running ahead of our schedules. There were bus stops that were being blocked or parked at.

If Ms Cullen believed that based on the way in which Citylink had received its licence, how can the representatives of Citylink now come before us and tell us that what it is now doing is not anti-competitive behaviour? It has interacted with the Department and sought licences. It has used all elements of the redress process, including appealing to the Department suggesting that another operator is using a dominant or anti-competitive position. However, it now flips that around and chooses to ignore an element of the process that it has used itself effectively. It succeeded in engaging departmental officials to assist it in following an investigation of its complaint, if it was a valid complaint and I have no reason to believe that it was not. However, it now believes that because of its size and scale, and more importantly, as Deputy Connaughton has pointed out, because of the scale of the penalties, it is going to ignore that same law because it does not suit it on this occasion. It is of concern to us because we are developing legislation at the moment and a Bill is going through the House. Based on what the witnesses have said, I would be concerned that they might have found an opening in that legislation. Do they see some path to undermine the efforts of the State to regulate the passenger bus service? It is very troubling for us because we believe in the principle based on the law as it has been established to date.

We will welcome the establishment of the new transport Bill when it comes into force. ComfortDelgro and Citylink are committed to Ireland. We want to operate here.

I want to clarify. Citylink is a private company that is committed to making profits. It does not have a social responsibility and does not operate PSOs.

Allow Mr. Singh to continue.

We are a commercial entity and need to make a profit. I hope the Deputy recognises that. We do not expect extravagant profits. Certainly we do not make any profit — right now we are making losses. No company can operate on losses indefinitely. Based on the books for the whole of this year, we made losses of more than 10% of turnover. Where does this leave us? We need to respond to market demand. The motorway has been built. There is a demand for a direct service. From next month the travel time from Galway to Dublin will be cut by two hours and 20 minutes. I must meet the demand for people who want to go directly from Galway to Dublin. There is enough for everybody. We are not out to put anybody out of business. We just want to compete. When circumstances change, we need to compete and be responsive. If somebody comes along and runs a direct service for several months without a licence, as the Deputy says, how can we continue? We need to respond. We need to meet the market demands. The people want a direct service, which is why they are travelling on our buses and on GoBus buses.

However, only one operator is licensed on that route at the moment as Mr. Singh knows and it is not Citylink.

As I said, we do have a licence.

Mr. Singh will fully appreciate that Citylink does not have a licence for that route.

No, sir. I believe we are in disagreement on that.

It is a bit like someone having a licence for a shotgun and using a rifle. A licence has certain terms and conditions that apply to it. One cannot switch and choose as one sees fit.

I make an appeal to Mr. Singh and Ms Cullen who has done a good job in running this company. How long have you been in Ireland?

We have been here for approximately ten years.

How long has Mr. Singh been here?

I am based in the UK, sir.

Mr. Singh does not live here. I make an appeal to him. We want to see a successful Citylink here. We want to see competition. For too long the country had inadequate bus services. I put it to Mr. Singh that Citylink is going about it the wrong way. The three main parties in the Oireachtas have today appealed to Citylink to stop this service. If it persists in that, it will not succeed in this country. I put it to Mr. Singh that Citylink should stop this service as a gesture of goodwill and its representatives should sit down with departmental officials. I put it to Mr. Weafer that the Department should immediately look at the licensing of some services for Citylink that would enable it to operate on this route. It should operate in accordance with the conditions as laid down by the Department. We want to see as many services as possible on this route. However, we want to see fair and legal competition.

I appeal to Mr. Singh and to Ms Cullen to stop this illegal route. Members of the Labour Party, Fine Gael and Fianna Fáil, the three main parties in the Oireachtas, have asked Citylink to do this. It is not that we are in favour of anybody else. We simply want proper competition and all companies to be treated equally. Mr. Weafer should immediately look at licensing some services for Citylink as he is prone to do. We have received complaints from GoBus and Bus Éireann about situations that exist across the country. We are not taking anybody's side on this. We are concerned that Citylink has come in and attempted to ride roughshod over everybody else. If it persists in doing that, every effort will be made to thwart its activities. It should be prepared to play by the rules. In the legislation we are dealing with tomorrow, we want to see companies like Citylink come in, expand and provide competition. However, we want a regulated competition, which is what is important.

I hear the Chairman's comments and I appreciate that he welcomes us to operate in Ireland. We very much want to continue operating in Ireland. If Mr. Weafer can give us a licence pronto to operate the services we want — a direct service — certainly we would want to go with that. That is what we have been asking Mr. Weafer. We have an application before him to——

He may not do what Mr. Singh wants because he cannot give Bus Éireann, GoBus or any other operator what they want either. However, he will certainly consider the merits of Citylink's situation and give it licences so that it can operate on this route as well as operating on the other route. I am sure he treats Bus Éireann and the others the same way. All we ask is for fairness for everybody.

If the Department can give us a licence——

Citylink must first stop the illegal work in which it is engaged. Once that has been done, the issue can be addressed and, I hope, sorted out. I thank Mr. Singh and Ms Cullen for having the courage to appear before the joint committee. They could have refused our invitation. The joint committee does not have anything against Citylink. I have used the company's services as I have used those of Bus Éireann and other companies. The other day, when I arrived at Dublin Airport, I had a choice between using Citylink, Bus Éireann or GoBus. I chose the service taking the direct route which, as it happens, was not the Citylink service. I was also aware of the company's illegal activity.

I assure the Chairman that the service is covered for insurance purposes.

I appeal to Citylink to cease its illegal activity to allow the problem to be resolved. I also thank Mr. Weafer and Ms Smith for coming before us.