The Dublin Bus route network needs an urgent overhaul to meet the needs of commuters, a report being submitted to the Department of Transport claims.

Dozens of under-used and overlapping routes should be scrapped and buses redirected to new housing estates on the city’s outskirts, according to management consultants Deloitte.

Dublin Bus is the capital’s largest public transport system, carrying 500,000 passengers a day. The firm’s own plans for network expansion require 325 extra buses, which would increase fleet size by almost one third at a cost of up to €100m.

But a senior government source said: “Dublin Bus has kept adding more routes rather than seeing if they can do it more efficiently. There has to be a review to make sure buses are going where people want them and they are travelling to places where people live and work.”

Noel Dempsey, the transport minister, has already opened talks with Dublin Bus and its sister companies, Irish Rail and Bus Eireann, about cost reductions. All three state-transport firms are losing money.

Dempsey met transport executives in November and December to demand cost-cutting measures. The annual state subvention to the three companies was €306m in 2006, €308m last year and a provision of €313m has been made for this year.

The minister also approved a 10% increase in fares from January 1 but demanded reduced services on, and even closure of, under-performing routes.

CIE — Dublin Bus’s parent company — is projecting an operating deficit of almost ¤40m for 2008 compared with a deficit of just €1.5m in 2007.

Dublin Bus conducted a network review in 2005 and promised to increase annual passenger numbers by 15m (10%) between 2006 and 2008. But John Lynch, the CIE chairman, last month conceded passenger numbers had fallen by up to 6% in a year. He blamed the recession, saying it had reduced the number of immigrants, traditionally heavy users of public transport.

Dublin Bus had planned to add extra services, including more orbital and cross-city routes, on top of the existing network and asked for an extra 200 buses in 2006-07, and 225 more from 2008 to 2011.

The company got 100 new buses at a cost of €30m in December 2006. With the government finalising plans for up to €2 billion in spending cuts in 2009, the prospects of new bus purchases are slim.

The Deloitte report, expected out this month, will recommend a radical reconstruction of the network with some routes being shut down or merged and buses reassigned to other areas. Government officials say an overhaul could lead to savings as well as making the service more attractive to customers.

Deloitte studied bus services to Finglas in north Dublin and found heavy duplication leading to congestion on eight routes in the area. At times, “bunching” occurred, with no bus for up to 20 minutes then three arriving in quick succession.

The consultants suggested a reduction in the number of routes involving Finglas would improve efficiency by ensuring a bus every seven to 10 minutes. The template proposed for Finglas could be duplicated across the city, according to a draft version of the report.

The CIE group is expected to face an operating loss of about €131m this year.

Lynch has said talk of redundancies across the three transport operators is premature. “He [Dempsey] is not privy to my plans. We’re examining it and will not come to a decision until the third week of January. We’ll look at the number of buses and decide what will meet demand, and then look at our cost base and see what we can do with it,” said Lynch.

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