Auckland has cocktail mix for traffic system success

By Mark McSherry

PERTH, SCOTLAND - A healthy increase in passengers using Stagecoach services since the firm moved into New Zealand is encouraging the Scottish-based company to set ambitious targets to get more people out of their cars and on to public transport.

Stagecoach is already the major operator of bus and ferry services in the Auckland region. It also runs bus services in other centres, including Wellington and Dunedin.

"The clear message for New Zealand is that we are a long-term player there," the chief executive of the worldwide group Mike Kinski said before leaving for Auckland last week.

The company employs 1800 staff in New Zealand and expects to make further capital investment.

"To date, every dollar we have earned in New Zealand we have reinvested back into the business.

"We have not taken dividends out of the country over the years - clearly at some stage we would want to get some return - but we have significantly reinvested back into the business," Mr Kinski said.

"But we see ourselves now very much working in public/private sector partnerships so that we can support the objectives of Auckland and, for that matter, our ongoing relationship with Wellington in terms of getting more people on public transport and to develop this integrated model."

The company's aim is to double the number of people using public transport in the Auckland and Wellington areas by the year 2005.

Mr Kinski said Stagecoach wanted to create a higher frequency bus network in Auckland and provide better services in the city centre, but that public/private partnerships were essential if improvements were to be achieved.

"Stagecoach could bring to Auckland the international best practice," said Stagecoach's country managing director Ross Martin. "There is a lot of work to be done, actually, but we do have in Auckland the right cocktail mix of companies and local bodies. Funds somehow or other to be channelled to double the usage by 2005, which Auckland needs.

"People in Auckland talk about it [the congestion] all the time. It's the big issue. They've all got two cars, by the way. So the bus has got to be as frequent and as pleasant to sit in as your car."

Stagecoach's first move into the Auckland region was the acquisition of Cityline services to and around South Auckland. Last year it added Yellow Bus and soon after acquired Fuller's Auckland ferry operations. Now it is the process of integrating the services, specifically by providing bus links to ferry services and developing new routes in conjunction with the Auckland Regional Council.

"The economy, I think, is going to be significantly enhanced in the next year or so with Apec and the America's Cup. The economy generally is picking up slightly. All of that can substantially be a good platform for moving the transport forward as well," Mr Kinski said.

"New Zealand is a very big market for us. We are very pro-New Zealand for the following reasons. We think the regulatory environment they operate is very similar to that of the UK. They are very pro-public transport. And for us therefore it is a very similar market for us to apply our UK best practice model."

Mr Kinski joined Stagecoach from the large multi-utility Scottish Power one year ago on a salary of œ360,000 a year and a bonus package of up to œ750,000 over five years. He was also paid a "golden hello" of œ250,000.

Mr Kinski was brought in by Stagecoach co-founder and executive chairman Brian Souter to create a new corporate structure at the fast-growing transport group as it makes the transition from a large family-owned business into a worldwide company running bus networks, rail service franchises, train-leasing companies, toll roads and airports around the globe.

His appointment frees up the entrepreneurial Mr Souter to roam the world looking for acquisitions and lucrative train-leasing opportunities.

Stagecoach, launched by Mr Souter and his sister Ann Gloag in 1980 with part of their father's redundancy cheque and two second-hand buses, has grown rapidly in sometimes controversial fashion to today's market value of 3.3 billion pounds.

The group now operates in Britain, New Zealand, Sweden, Finland, Hong Kong, China and Australia. It has pulled out of Kenya and Malawi. The firm hopes to re-enter the North American marketplace soon.

Stagecoach also hopes to expand in Australia.

Mr Kinski said: "We run about 300 school buses in Queensland and that operation is run by Ross Martin.We have been bidding for the rail privatisation process in Melbourne and we did not get shortlisted on that for the simple reason that some of the prices I think were uncompetitive as we saw it.

"We see growth in New Zealand and Australia as being good opportunities for us. We would see bus, rail and airports as being opportunities. Infrastructure projects would be things we would be keen to explore with partnerships. We see it as a very big market, we like the environment and therefore are exploring potential opportunities as they come along."