Subsidy dispute threat to buses

Stagecoach is threatening to withdraw dozens of peak-time bus services unless the Auckland Regional Transport Authority pays the company millions more dollars a year in subsidies.

Authority chief executive Alan Thompson confirmed yesterday that the company's request to deregister a long list of unsubsidised services was of serious concern to his organisation, a subsidiary of the Auckland Regional Council.

"What we are doing now is working through how we respond to that, because a whole lot of people out there rely on those services."

While that work was being done he was reluctant to specify which routes were at risk of losing buses in September, or how much it would cost the authority to retain them.

He said, however, that the routes were widespread and the exercise could add several million dollars to the $35 million or so in subsidies Stagecoach now receives each year from regional rates and Government funding.

Mr Thompson said the company had advised his organisation of a 10 per cent reduction in patronage in the past year, for various reasons, including the lingering effects of the now-resolved bus drivers' pay dispute.

The bus operator is also investigating whether the boom in inner-city apartment living is affecting its business.

Stagecoach executive chairman Ross Martin said he was unable to confirm a suggestion that the bill could run to $8 million if all services were to be retained, which seems unlikely.

He also dismissed fears expressed by regional council chairman Mike Lee that the company may be eyeing revenue from the $1.3 billion of assets controlled by council subsidiary Auckland Regional Holdings.

Mr Lee said last night that the money was supposed to be for infrastructure development, not "corporate welfare".

But Mr Martin said the company had yet to return a dividend to Britain after spending $80 million on new buses.

He said Stagecoach had tried to keep uneconomic bus services running for some time without subsidies and against rising fuel costs, but could no longer afford to do so.

It was now up to the transport authority to decide whether to support them for social reasons.