Go Bus wins South Auckland contracts formerly held by Infratil
Iwi-owned Go Bus has won four South Auckland public transport contracts after Infratil's [NZX: IFT] NZ Bus unit failed in its bid to retain the contracts.
In January, infrastructure investor Infratil said it had missed out on the tender in South Auckland, where it ran about 153 buses. The company said it was still in direct negotiations with the local body agency to renew other contracts representing about half of its existing business in Auckland.
Go Bus, which was bought by iwi investment companies Ngāi Tahu Holdings Corp and Tainui Group Holdings for $170 million in August 2014, said today it had been awarded the contracts "following a competitive tendering process."
"Go Bus currently provides contracted urban bus services to more regional authorities in the country than any other operator, and we have a strong track record of providing passenger transport in busy urban areas," managing director Calum Haslop said. "Entry into the Auckland market signals a new phase in our continued growth."
When the contracts start in October, Go Bus will supply 89 buses, mostly brand new low-emission buses built in New Zealand. The company said it would invest $40 million in new vehicles, equipment and two new depot facilities, with 250 new driver and management jobs created.
The contract areas cover the airport service, Mangere Bridge to Auckland CBD, Papatoetoe/Otara and Otahuhu. Go Bus said it would improve services around the new Manukau and Otahuhu interchanges, and connect passengers with Wi-Fi and USB charging.
The South Auckland services made up about 14% of the Infratil subsidiary's national fleet of 1070 buses. Go Bus, which also provides school bus services, special needs transport and tour and charter services, has about 360 urban service buses in its fleet of over 1600 vehicles, and more than 1900 staff.
Infratil's bus division generated earnings of $22.7 million in the six months ended September 30 on revenue of almost $119 million, up slightly from a year earlier.
Infratil shares last traded at $3.19, and have fallen 2.3% so far this year.