The latest environmentally-friendly buses, each seating 37 passengers, are now rolling off the new Kiwi Bus Builders assembly plant in the Tauriko Business Estate.
The first of the Enviro200 buses, destined for Auckland, was unveiled yesterday by NZ Bus and the Minister of Transport Steven Joyce.
The mid-sized buses, ordered by NZ Bus in a contract starting at $50 million, are designed and built in Scotland by Alexander Dennis, sent in kitset form to Tauranga, and assembled by Kiwi Bus Builders.
Mr Joyce said NZ Bus had made a significant investment and was leading the delivery of some of the most modern and safe buses available.
NZ Bus chief executive Zane Fulljames described it as a new era of bus travel in New Zealand.
"This is a really important day for us. The first bus off the production line represents a step change in public transport provision," he said.
The fully air-conditioned buses are the most lightweight, durable and fuel efficient in the world, said Colin Robertson, chief executive of Alexander Dennis, Britain's leading bus and coach manufacturer with staff of 2000.
Alexander Dennis has developed manufacturing partnerships in North America, Hong Kong, China and now New Zealand.
The Enviro200 buses are built to Euro 5+ emissions standard, being 90 per cent cleaner than the buses they are replacing here and reducing carbon emissions by about 2000 tonnes during their first year of operation.
Inside, the buses are simple but efficient for passengers. There is a step-free entrance and exit with a wheelchair ramp, large windows and bright lighting, and comfortable Italian-designed high-back seats with plenty of leg room.
NZ Bus, owned by public-listed utilities investment company Infratil, has initially ordered 118 new buses in the first stage of its fleet replacement programme. It runs 1100 urban buses in Auckland, Whangarei and Wellington.
Kiwi Bus Builders - it has two production lines for the NZ Bus contract - is now geared up to supply four buses in a week.
The Tauranga company, employing at peak 170 people, will be sending 30 buses to Auckland in good time for the Rugby World Cup, and it will complete the initial order by March 2012.
Mr Fulljames announced yesterday that his board of directors had just approved spending another $16 million for 40 more buses.
He said NZ Bus would probably end up placing an order for a further 250 buses, to be supplied over four years to the end of 2015. It would mean that 40 per cent of NZ Bus' fleet is modernised and the bus operator would have invested a total $200 million.
Mr Fulljames indicated that Kiwi Bus Builders would likely retain the contract. NZ Bus would also consider buying larger double decker, and diesel and electric hybrid buses. Kiwi Bus Builders' tie-up with NZ Bus and Alexander Dennis has provided a welcome boost to the company and local economy.
About a quarter of the bus components are locally sourced, producing projected revenue of $38 million over four years.
After winning the assembly contract, Kiwi Bus Builders increased its staff from 80 to 170 - representing an injection of more than $4 million worth of wages into the Tauranga economy.
Kiwi Bus Builders will hire another 20 people when it starts building the Enviro200 bus chassis later this year.
Richard Drummond, managing director of Kiwi Bus Builders, said the partnership (with Alexander Dennis and NZ Bus) showcased New Zealand as a country of "can-do people".
He said the first bus (prototype) took two months to assemble and paint. But now the turnaround was down to 20 days including painting, and there were 20 buses on the production lines at any one time, in various stages of completion.
Mr Fulljames said its new fleet programme was the single largest investment in the five-year history of NZ Bus, and represented a positive outlook in support of the Government's intentions to deliver public transport solutions based on long-term partnerships between public and private sectors.
NZ Bus provides the public transport services for the new council's Auckland Transport, and Greater Wellington Regional Council.
Auckland Transport is announcing, on August 22, new loop bus services for the city.
The buses will have different colours to identify the new services.