Bus Éireann is facing an EU investigation over claims that the school bus scheme it operates on behalf of the Department of Education is an illegal State aid.
The bus company has been operating the school transport service for the department since the 1960s, but US-backed Student Transport Scheme (STS) argues this is a breach of EU public procurement rules and says the €150 million-a-year service should instead be put out tender.
STS confirmed at the weekend it had formally complained to the EU Commission, and had received a reply from officials stating the claim would be registered, which indicates Brussels is likely to investigate it.
Distortion
EU law defines this form of aid as an unlawful payment by a state to an individual entity that could have the effect of distorting competition. Any arrangement between a state and any other organisation that risks breaking this rule must first get approval from Brussels.
In the company's submission to the EU, STS's solicitors, Brian Lynch and Associates, say an unlawful payment is one made by a State authority for what is more than the market price charged by competitors throughout Europe.
It claims one of the examples of this in the case of the Republic’s school transport scheme is the maintenance charge applied by Bus Éireann for the upkeep of school buses, which STS says is more than five times what competitors charge.
The company is appealing a 2012 High Court ruling dismissing its claim that the service should be put out to tender. The judgment upheld the department's position that its relationship with Bus Éireann is not a commercial contract, but an administrative arrangement between two arms of the State, where the minister "instructs" the company to provide the service.
