Infratil's NZ Bus concludes Wellington negotiations
Infratil, the publicly listed infrastructure investor, finished its NZ Bus negotiations in Wellington, with contracts to begin in the second half of this year.
In a release to the stock exchange, Wellington-based Infratil said it has secured five long-term contracts in the capital, and the deal is "consistent with Infratil's market messaging on the expected future scale of the NZ Bus business and earnings guidance."
Last year, the company said NZ Bus's loss of certain public transport contracts meant it would shrink to about two-thirds its original scale, with 75 percent of the business in Auckland and 25 percent in Wellington. In May 2017, NZ Bus lost most of its bus contract with the Greater Wellington Regional Council to Masterton-based Tranzit Group, which the council said could offer the service cheaper, reducing its share of services to 28 percent from 73 percent.
Zane Fulljames, NZ Bus chief executive, said the contracts were worth about $323 million with an average term of 10.8 years. The company expects to invest some $31 million in its new fleet, including an additional 17 doubledecker buses.
"Electric vehicles are the future of public transport and will be a key focus now the contracting process in Auckland and Wellington has concluded," Fulljames said. "We are extremely well positioned for future market and technology challenges and have a solid platform to continue our journey towards cleaner and greener transport solutions."
Infratil shares fell 1.5 percent to $3.22, and have risen 8.6 percent in the past 12 months.