Souter slams sell off
Page 14
If you've noticed an error in this article please click here to report it so we can fix it.
• Stagecoach Holdings chairman Brian Souter has hit back at suggestions by the Department of Trade and Industry that his company should sell off part of Portsmouth Citybus "in the public interest".
An inquiry by the Monopolies and Mergers Commission found that the Perth-based company, Europe's largest private bus company, was acting against the public interest when it took over Citybus last October. The Commission recommended restricting Stagecoach's ability to use fares and frequency of service "as a predatory weapon against potential competitors" but Nicholas Ridley, in one of his last decisions as Trade and Industry Secretary, said he believed these measures did not go far enough and asked the director general of fair trading to enter negotiations with the company to ensure that competition is maintained.
Ridley said: "I consider at this stage that this will best be achieved by the divestment of part of the merged business corresponding to that formerly operated by PCB."
Souter slams the DTI solution as "misconceived and impractical", stressing: "The Commission found no evidence of any anti-competitive behaviour since the takeover by Stagecoach subsidiary Southdown Motor Services, but we are the scrapegoat for misinformed speculation about what may or may not happen in the future. If Stagecoach had not taken over Portsmouth Citybus when it did, we believe, since PCB had incurred losses of 590,000 in 15 months following its privatisation by the city council, there would have been no viable company left today."
The director general of fair trading has to report back to the DTI within two months of the outcome of negotiations with Stagecoach. If "satisfactory undertakings" cannot be achieved, the DTI may use an order to enforce "appropriate remedies", says Ridley: "I am determined that effective corn petition should be preserved in the bus sector just as in any other."
But Souter says: "The DTI thinks the best thing for us now is to turn the clock back and restore PCB to its previous state. By such inconsistent logic the Department does a great disservice to our bus employees in the Portsmouth area, who now find a new uncertainty hanging over them."