The High Court has ruled that the State’s School Transport Scheme, administered by Bus Éireann for the Minister for Education and Skills, was not a public contract within the meaning of the relevant European procurement rules. It refused Student Transport Scheme Limited’s application for a declaration that the arrangement was ineffective.
The judgment was delivered by Mr Justice Brian J. McGovern on 23 October 2012. The case was brought by judicial review and admitted to the Commercial Court. The substantive relief pursued at the hearing was a declaration under the European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010. The question of damages, if any, had been deferred.
The applicant argued that a contract existed between the Minister and Bus Éireann and should have been put out to tender. The Minister and Bus Éireann denied that there was a contract. The court heard that the scheme began in 1967, when the Minister entrusted its administration to Córas Iompair Éireann (CIE) as the Minister’s agent. Bus Éireann, a subsidiary in the CIE group, later administered it.
The scheme served about 111,000 pupils each school day, including about 8,000 pupils with special needs, across roughly 3,000 schools and 6,000 routes. Bus Éireann arranged services, assessed eligibility, managed operators and recovered costs through accounting arrangements with the Minister. The Minister also paid an agreed charge for other direct and indirect costs; the judgment said that charge had been reduced at the Minister’s direction in each year since 2008.
The judge found that the arrangement was administrative in nature and lacked terms normally associated with a commercial contract. Bus Éireann administered the scheme as the Minister’s agent, under the Minister’s policy and eligibility rules, and had no choice about taking on the work. The court also found no cogent evidence that the essential terms had been renegotiated to create a new contract. It said that even if a contract existed, the Teckal exemption would apply.
The judgment also addressed other issues. It said the applicant was out of time on the assumption that a contract had been concluded for the 2011/2012 school year, and held that the applicant had not established eligibility to bring the proceedings. Those conclusions were additional to the central finding that no contract existed. The court therefore held that the procurement remedies provisions did not apply and refused the requested declaration. The judgment does not determine any damages claim.