Bay bus passengers face 7pc fare hike

Tauranga bus fares are going up to cover the costs of inflation. Photo / John Borren

The cost of catching the bus in Tauranga looks set to increase by up to 7 per cent next year to combat inflation.

Bay of Plenty Regional Council's public transport subcommittee has recommended an overall 5 per cent increase in bus fares for Tauranga and Rotorua.

Hardest hit will be Tauranga's $3 adult cash fare which, once rounded up to $3.20, is an increase of nearly 7 per cent.

The cash fare for passengers aged 5 to 15 and peak-travel Gold Card holders will go up 10c, an increase of just over 5 per cent.

Fares for Smartride card holders will increase by 5 per cent because there is no rounding up.

Council transport policy manager Garry Maloney said the 5 per cent fare increase for Tauranga was expected to boost revenue by $73,000 but reduce patronage by about 1 per cent or 18,700 fewer passenger trips.

Next February's increase will be the first since September 2012, when fares shot up 15 per cent.

Mr Maloney said that, unlike Rotorua, he was unable to say how much the 2012 increase had reduced the net cost to the council.

The gross cost of Tauranga's bus contract had risen $217,000 since September 2012, from the impact of 3 per cent inflation. Mr Maloney said it would need 83,000 extra adult cash-paying passengers to fully offset the cost of inflation. He said the 5 per cent increase was closer to covering the actual extra inflation costs since 2012. It also meant the council had a better chance of achieving its fare recovery targets, following the decision to not charge for the first term of next year's new Schoolhopper bus service.

The council's target for the 2014-15 financial year was to recover a third of the cost of the service from fares.

Bayhopper was also funded by ratepayers, the New Zealand Transport Agency and the Ministry of Social Development.