The Department of Education and Skills has welcomed the publication of the European Commission’s Decision into its investigation of alleged State aid, specifically as it relates to the school transport scheme
Bus Éireann operates the school transport scheme on behalf of the Department. The scheme has been in existence since 1967, and is based on accounting arrangements put in place in 1975.
An investigation was launched by the Commission after receiving a complaint in 2007 that, among other activities, alleged unlawful aid was being provided to Bus Éireann in respect of school transport services. The Commission’s Decision has found that the scheme was existing aid and for this reason was not unlawful at the time the complaint was made. The Commission has indicated that it will now begin dialogue with Ireland to update those arrangements and bring them into line with the internal market and the Department looks forward to this engagement.
The Commission’s findings support a High Court judgement on school bus services. Student Transport Scheme Limited (STS) brought an unsuccessful challenge to the scheme, contending that it constituted a contract within the meaning of EU public procurement law. The High Court upheld the Department's position that there was no evidence of any such contract and that the procurement directives did not apply to the scheme, as it was put in place in 1967. The Commission’s findings support the Department's position on the application of the procurement rules.
Student Transport Scheme Ltd is currently appealing the High Court’s decision and a date for hearing is awaited.
Notes for Editors:
Commission Decision C-31/2007 of October 15th 2014 on State Aid implemented by Ireland for Córas Iompair Éireann Bus Companies (Dublin Bus and Irish Bus) (the “Commission Decision”) has no positive impact on the challenge brought by Student Transport Scheme Limited (“STS”) in 2011 and supports the arguments made by the Minister for Education & Skills. STS was unsuccessful in its proceedings before the High Court and has appealed the High Court judgment. A date for hearing of the appeal is awaited.
The complaint to the Commission was made in 2007, four years before STS was created. The Commission noted that Bus Éireann operated the School Transport Scheme (“the Scheme”) on behalf of the Department of Education and Skills and that the Scheme has been in existence since 1967 and based on accounting arrangements put in place in 1975. The majority of the Scheme’s services are currently sub-contracted by Bus Éireann. The Commission decision, insofar as it relates to the STS, held that the Scheme constituted existing aid within the meaning of Regulation EC No. 659/99 and accordingly was not unlawful at the time that the complaint was made. However, the Commission indicated that it would initiate dialogue with Ireland to agree on appropriate measures to ensure that the Scheme is compatible with the internal market in the future.
STS’s appeal does not concern state aid issues. Rather, STS contended that the Scheme operated by the Minister since 1967 constituted a contract within the meaning of EU public procurement law which came into existence in 2011. The High Court upheld the Minister’s position that there was no evidence of any such contract having coming into being. In any event, the Minister argued that the procurement directives did not apply to Scheme as it was put in place in 1967. The approach taken by the Commission on the State Aid question supports the correctness of the Minister’s position on the temporal application of the procurement rules.
The High Court decision is available here: http://www.courts.ie/Judgments.nsf/0/AEE73D6730D755B180257AAF003BF639