Payouts rise to keep Stagecoach buses running

Auckland's transport agency has started forking out millions of extra dollars to prop up bus and ferry services which Stagecoach says it cannot afford to keep running without subsidies.

The Auckland Regional Transport Authority has stepped in to save scores of services from being stripped this week from 12 routes in such critical areas for commuters as Otara, Mt Wellington, Te Atatu Peninsula and East Coast Bays.

Stagecoach had served notice of deregistering these as commercial routes, leaving the authority to decide whether to keep them running with subsidies of almost $8 million a year.

Ferries from Half Moon Bay to Auckland, which Stagecoach subsidiary Fullers offers as a faster way of making the trip at peak times, will account for about $900,000 of that.

Transport authority service manager Mark Lambert said his organisation's parent, the Auckland Regional Council, had agreed to pay half the required subsidies for the rest of this financial year.

Its contribution from regional rates would be matched at least until December by Land Transport New Zealand, but that Government agency wanted to review its involvement before continuing subsidies for the rest of the year.

The expenditure will boost the $40.6 million Stagecoach was already expecting to receive in subsidies from its Auckland operations.

But Mr Lambert said the alternative, of leaving parts of Auckland without public transport at a time of rising fuel prices, was untenable.

"We couldn't afford to stand by and do nothing and just allow huge gaps in tenders, because that would disadvantage people who do not have an alternative option."

The authority hoped high petrol and diesel prices would encourage more people to use public transport.

Mr Lambert said all services would be preserved for now, although there could be some limited "rationalisations" next year, such as when routes were reviewed to cater for the new Sylvia Park retailing centre.

Regional council chairman Mike Lee, who in July wondered whether British-owned Stagecoach viewed his organisation as a soft touch for dispensing "corporate welfare", could not be reached for comment.

Mr Lambert said Stagecoach had shown his organisation a report by accountants Ernst and Young, verifying that the company suffered a net operating loss last year.

"But we will still be asking questions - we are reserving our judgment."

The bus company has complained of declining patronage in the past two years, largely from a drop in foreign language students coming to Auckland and competition from rail.

Although the Bus and Coach Association said last month that patronage had started increasing again on some Auckland routes, probably because of high petrol prices, it would not identify which company operated these.

Stagecoach executive chairman Ross Martin said last night that it was not his company, which was still waiting for patronage to bottom out, compared with a 4 per cent annual growth rate in Wellington.

Mr Martin said the routes which the transport authority had agreed to subsidise had proved unprofitable for Stagecoach for several years, and the company could no longer afford to maintain them unassisted at a time of soaring diesel costs.

Shifting people

* Stagecoach New Zealand is part of an international bus and rail transport empire based in Perth, Scotland, with operations in Britain, the United States and Canada as well as in Auckland and Wellington.

* It runs more than 900 buses in New Zealand and eight ferries through its Fullers Auckland subsidiary, among a global fleet of 16,000 vehicles and rail stock, and has an annual international turnover of around $4.65 billion.