Kilbirnie bus depot has been sold for $35 million, leaving NZ Bus short of a location to store part of its Wellington fleet.
It's the latest headache for Wellington's troubled public transport system after the regional council announced this week it would be axing some peak-hour services to cope with a driver shortage.
Infratil used to own NZ Bus but sold the operator to Next Capital in 2019. The land at 45 Onepu Rd in Kilbirnie was not part of the deal.
Infratil's full-year results for the year ended March 31, 2021, states the sale of the depot was closed for $35 million.
NZ Bus chief executive Barry Hinkley confirmed the operator was working on a plan for a new depot.
"We've found a preferred location for a new depot and are negotiating terms with the
landowner, which are commercially confidential," he told the Herald.
Greater Wellington Regional Council chairman Daran Ponter said the situation was a known issue for both the council and NZ Bus.
He said land was becoming more and more scarce in Wellington.
"NZ Bus are going to have to work quite hard to actually find one or more locations to put their buses to sleep at night.
"It's a bit galling to see what were significant public assets slip through our fingers through all these commercial transactions over the years. So we don't have much choice now, if we want to get back into the market, we have to pay a premium."
Wellington Tramways Union secretary Kevin O'Sullivan confirmed he was aware of the sale.
"Who knows where the buses are going to end up but there's not much land around. The depot is a vital bit of infrastructure."
The depot is a strategic asset for the services NZ Bus runs in the east of the city.
Under current contracts, operators don't get paid for when buses aren't in service like when they are driving from a depot to the start of a route.
"So if they have to drive for miles to get somewhere to start a run then it's a big cost to the operator", O'Sullivan said.
"Having the depot there where most of their work is centred within 4 or 5km is a big advantage for them when they tender for contracts."
NZ Bus has four Wellington depots located in Kilbirnie, Kaiwharawhara, Karori and Eastbourne.
Both Ponter and O'Sullivan said they understood NZ Bus has been given a two-year lease for the Kilbirnie site while preparations are made for redevelopment.
Wellington City Council confirmed it has not received a resource consent application for any development at the site.
There has been speculation the Rita Angus Retirement Village, which is the neighbouring property to the site, has expansion plans.
But a spokesperson for Ryman Healthcare said they were not involved in the Kilbirnie bus depot site at all.