Cliches become overused for a good reason: they’re often true. The one that says the only thing worse than a State monopoly is a private one is a prime example, as everyone growing old waiting on a national car test (NCT) now understands.
The NCT system in Ireland, which is run by a single operator, Spanish group Applus, is creaking like an old suspension joint. Its online booking system is showing wait times of up to six months. Only now is Irish officialdom properly waking up the customer service disaster that has been endured for nigh on two years now by Irish motorists waiting for the Godot of a vehicle safety test.
The system never recovered when antivirus restrictions ended and now it is swamped. The epic wait times force many motorists to drive with out-of-date NCT certs, making them wholly reliant on the goodwill and discretion of individual gardaí. It is a legal and insurance time bomb waiting to explode.
[ NCT delays: Fears State could be sued over long waiting timesOpens in new window ]
Applus has been the monopoly provider since 2009. Months before the pandemic, it signed a new 10-year contract that is likely to generate a total of more than €800 million of revenues for the Spanish operator, based on the run-rate in an average year. Unfortunately, it will be the sole provider for quite a few years to come.
It seems incongruous that the stability of such a critical State function, the system for ensuring that all cars are roadworthy, relies upon the operational decisions and competency of a handful of private executives who answer to a parent company in another jurisdiction. The Road Safety Authority, which awards and oversees the contract, doesn’t seem to know what to do to fix the delays.
Applus argues that the root of the problem is a shortage of mechanics across Europe, limiting its pool of qualified testers. It says this hampers its ability to scale up to deal with the backlog of NCTs that built up early in the pandemic, when the Government shut down test centres for four months.
It is not an empty excuse; there really is a shortage of mechanics in countries such as the UK, which needs thousands of them, and elsewhere across the continent. Yet Applus might be able to attract more mechanics if it simply paid them more. The company has been down to the Labour Court on numerous occasions in recent years. It has shipped criticism from Siptu, which represents 600 Applus workers, because the company has previously claimed it cannot afford to boost pay by much.
[ Lowering qualification standards for staff among measures to fix NCT systemOpens in new window ]
Its most recent visit to the court was three weeks ago, as part of year-long negotiations with Siptu for the proposed hiring of lesser-qualified workers, known as inspection support personnel (ISPs). Presumably, they could take care of simpler tasks, such as the quick visual inspections for minor issues for which motorists often must return to NCT centres. You don’t need to know how to strip an engine to check if a bust indicator bulb has been properly replaced.
The Labour Court, which rarely is in a hurry, recommended that the ISP system be trialled for a year, but only in the five Dublin testing centres. After this, a review would be held and both sides could return to the State’s industrial relations machinery for further recommendations.
The court said the number of ISPs should not exceed 10 per cent of the inspection staff, which would limit their numbers to about 60. That’s only a little more than one ISP for each of the testing centres in the State.
In the meantime, motorists would still be pulling their hair out. More dramatic action is required. Applus should be threatened with fines if it doesn’t embark upon an international hiring spree.
The company claimed in a separate Labour Court visit last year that it had almost no cash for pay claims because it made a €1.3 million loss in the first year of the pandemic. This is both true, but slightly misleading. The Applus group in Ireland has plenty of cash. The new 10-year contract signed in 2019 is carried out by Applus Inspection Services Ireland Limited, which did indeed make a €1.3 million loss, although it followed that up with a €1 million profit last year.
If Applus had another competitor in the NCT system with shorter wait times, then maybe the current plague of testing delays would be cured faster
But the previous 10-year contract was held by a different subsidiary, Applus Car Testing Service, which has been a huge cash cow for the Spanish parent group.
The newer Applus subsidiary has not yet paid any dividends to Spain. But the older subsidiary, which handed over its RSA contract to its younger group sibling, sent €1.5 million in cash from its Irish operation to its shareholder in Spain last year, right at the same time that the Irish NCT system was starting to fail like a banger’s engine.
The older subsidiary paid no dividend to Spain in 2020 when the pandemic hit. But it sent over a chunky €23.6 million in cash payments over the previous four years. If even a fraction of that money had been kept in Ireland to buttress the wider Applus group’s operation here, surely some of it could have been invested in the new subsidiary to fund a hiring spree, which would end the delays.
What makes the NCT delays all the more galling is that the two Applus subsidiaries, between them, took €5.3 million in Covid subsidies from Irish taxpayers in 2020 as the pandemic hit. Then, the following year, the older subsidiary sent a dividend equivalent to almost half of the cash it received to Spain.
If Applus had another competitor in the NCT system with shorter wait times, then maybe the current plague of testing delays would be cured faster. As well as competing for customers, they could also compete for mechanics. Perhaps that would incentivise both of them to go abroad and find new hires. As things stand, Applus has no incentive to do this. It knows full well that, as a monopoly, all of the deferred business eventually will return to it anyway. Where else can people go?
Sweden, whose population is only twice the size of Ireland, has seen the sense in liberalising its system. Over the last decade, its previous car testing monopoly has been replaced with a system of four competing operators, one of which is Applus. Irish policymakers, take note.
