GARDA INVESTIGATION LAUNCHED INTO ‘RIGGING’ OF SCHOOL BUS TENDERS

How cartel may have cost Bus Éireann hundreds of thousands of euro

BUS Éireann’s €150m School Transport Scheme is at the centre of a criminal investigation into allegations that a cartel of private contractors rigged tenders worth millions of euro.

The investigation is being run by the Competition and Consumer Protection Commission (CPPC) with the help of the gardaí.

Because Bus Éireann receives €150m annually in taxpayer funds to administer school transport, the scheme is vital to the survival of the ailing semi-state.

But the MoS has exposed controversies at the scheme, including private contractors offering kickbacks to Bus Éireann inspectors.

The latest of these scandals exposed a contractor earning €70,000 a month from school routes who had offered a free beach front apartment stay in Lanzarote to three Bus Éireann inspectors.

As a result of these scandals the Government’s spending watchdog, the Comptroller & Auditor General, is now investigating the use of the millions provided to Bus Éireann by the Department of Education for school transport.

Now the MoS can reveal that the CCPC is investigating criminal allegations of a cartel among over a dozen operators who were awarded school route tenders by Bus Éireann.

Last night the CCPC confirmed it was ‘investigating potential bidrigging’ in Tipperary, Waterford, Limerick and Kilkenny.

In a statement to the MoS, CCPC chairwoman Isolde Goggin said: ‘Bid-rigging in public procurement can be particularly harmful as it can artificially increase prices and ultimately costs taxpayers more and reduce the services the State provides.’ Investigators believe up to 20 private firms contracted by Bus Éireann may have colluded to fix their tender bid prices.

The investigation, launched last summer, has already seen almost 20 raids carried out across private bus depots in four counties. While most of these firms are involved in school transport, a number have also tendered for other public transport routes with Bus Éireann.

The raids began with coordinated morning calls on July 6 and 7, 2016, during which substantial volumes of documents were seized.

Authorised CCCP officers and several gardaí, including a detective sergeant from the Garda National Economic Crime Bureau, carried out the searches. Officers seized hard drives, phones and digital storage devices.

The home of a contractor and businessman who is alleged to have been running the cartel was also raided. This individual is understood to have organised information meetings in the past three years which dozens of other private operators attended.

After these meetings many operators retained this individual on a commercial basis to assist with tender applications. As such, he completed and submitted tenders for many routes on behalf of his clients – at times delivering multiple applications on behalf of others to Bus Éireann in person.

The MoS understands that the investigation is largely focused on these tenders and the possibility that bids may have been inflated in an organised fashion by as much as €50 per route per day.

With more than 50 routes involved, the allegedly rigged bids could have resulted in Bus Éireann paying out hundreds of thousands more than if tenders had been awarded competitively.

Fianna Fáil’s transport spokesperson Robert Troy said it was concerning to hear of such losses at Bus Éireann given the financial crisis at the company.

Meanwhile the CCPC said its investigation was ongoing and appealed for individuals who may had evidence to come forward.

All of those raided were offered the chance to enter the CCPC’s Cartel Immunity Programme. A

‘Involved more than a dozen operators’

valuable tool for breaking cartels, the programme is run in conjunction with Director of Public Prosecutions and offers immunity from prosecution to the first member of a cartel who cooperates with the authorities.

Up to 2014, Bus Éireann did not operate a public tendering process for school routes. Instead, senior employees at Bus Éireann’s network of school transport offices were responsible for allocating routes. In a 2012 submission to the National Transport Authority, the Competition Authority pointed to the need for careful design of a tender process to prevent the emergence of cartels and bid-rigging.

But the CCPC said that in preparing its tendering processes, Bus Éireann had not availed of CCPC expertise and advice.

‘Inflated by as much as €50 per route per day’