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Badgerline deals appease DTi

12th October 1989
Page 18
Page 18, 12th October 1989 — Badgerline deals appease DTi
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Which of the following most accurately describes the problem?

• The Department of Trade and Industry has accepted undertakings given by Badgerline Holdings following its purchase of Midland Red West Holdings last year, and a sub sequent report by the Monopolies and Mergers Commission.

The undertakings could set a pattern for future takeovers by bus operating groups. Badgerline has agreed not to de register commercial services and then re-register them if it fails to win contracts for the Avon County subsidised services which replace them. This undertaking applies to Badgerline and to the former Midland Red West-owned Cityline.

Badgerline will submit tenders for every contracted service in Avon, and Cityline will tender for all services starting from Bristol. Prices in tenders should not exceed the direct costs and a 20% contribution to overheads and profit, less the expected revenue. If actual revenue exceeds the annual estimate, 50% of the excess will be refunded to Avon. Figures will be based on the on-bus revenue plus 10%.

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