Bus and rail passengers face higher charges in the years ahead, with reviews of fares set to take place annually.
Bus and rail fares are already scheduled to increase by 15 per cent from January, ending a period going back to 2018 marked by fare reductions.
Official papers released by the Department of Transport show that the new fare increases came about on the back of strong pressure from the Department of Public Expenditure.
It argued there had been a deal with Minister for Transport Darragh O’Brien 12 months ago that fare reductions put in place in 2022 would be reversed by the middle of this year, as part of an overall €940 million exchequer allocation to subsidise non-commercial bus and train services.
The Department of Public Expenditure maintained the reversal of the 20 per cent cut in bus and train fares introduced in 2022, as part of a Government cost-of-living package, was to take place by June.
The Department of Public Expenditure told the secretary general of the Department of Transport on April 24th that it was concerned and disappointed to learn that this initiative was not to be progressed as scheduled, and that August was being considered as a date for any fare rise.
The Department of Public Expenditure also maintained it had learned that, rather than the full reversal of the 20 per cent fare cuts, consideration was being given in the transport sector to a rise of 10 per cent.
The minutes of an official oversight group reviewing State funding for bus and train routes, dated April 20th, state that the Department of Public Expenditure believed fare revenue should pay for the delivery of new services.
The minutes of the group, which includes the Department of Transport, the Department of Public Expenditure, the National Transport Authority (NTA) and New Era, the agency that provides advice to Ministers about commercial State companies, state: “If new services are funded solely through fare revenue this would require substantial additional fare revenue to sustain into following years.”
The NTA has said available funding has been primarily directed towards maintaining existing services.
On August 28th, NTA chief executive Anne Shaw told O’Brien of a planned 15 per cent fare rise to be announced in September.
Shaw said that to support the long-term sustainability of the State subsidised routes – known as public service obligation (PSO) – and provide greater certainty in funding, it intended “to undertake an annual review of fares”.
Shaw said the NTA recognised that fare increases may be of concern to some passengers. However, she said PSO fares had not increased since 2018, despite rising inflationary operating costs over that period. “Even following this determination, many fares will remain below the levels that would have applied had fares increased in line with inflation since 2018.”
Shaw said a consistent theme of talks involving the departments of Transport and Public Expenditure had been “the need to place PSO services on a more sustainable financial footing, with fare revenue making a greater contribution. These fare adjustments are an effort towards rebalancing the critical equation in how we fund PSO public transport nationally.”
Shaw said that while there had been a substantial increase in exchequer funding for PSO services this year, “continued inflationary pressures have increased the cost of operating public transport services”.
She said available funding had primarily been directed towards maintaining existing service levels.
The Minister has maintained that about 140 new and enhanced transport services will come on stream next year.