The Government gave incorrect information to the European Commission about its €160 million-a-year agreement with Bus Éireann to operate the school transport scheme shortly before Brussels began investigating claims that the arrangement constituted illegal state aid.
The commission is investigating claims that allowing the company to exclusively operate the Department of Education’s school transport scheme is a form of illegal state aid.
In 2012 the department told the High Court the agreement was neither aid nor a contract, and is not profitable for Bus Éireann, which only recovers its costs for the service.
However, in a letter to STS Ltd, which brought the High Court case, the Chief State Solicitor, Eileen Creedon, confirmed the Department of Transport described the agreement as a contract in a submission to the European Commission in 2007.
‘Erroneous’ description Ms Creedon’s letter said this description was “erroneous and occurred at the informal stage of an entirely separate state aid matter”.
The Department of Transport said the school transport scheme was operated “under contract with the Department of Education and Science on a cost recovery basis”.
It made the statement in a submission to the European Commission in 2007 as Brussels officials were considering investigating the scheme following complaints from private bus companies.
The commission is carrying out three investigations into the scheme, which is also at the centre of a court battle.
The Department of Transport, Tourism and Sport did not comment yesterday.
