Competition ups subsidies bill
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INCREASED competition for private operators on express routes and contract hires has meant a reduction in profit for Scottish Bus Group. As a result, Grampian Regional Council must pay SBL £168,000 — in spite of having given their revenue support of £1.9m during the past four years.
The council's policy and resources committee was told last week that the Scottish Secretary George Younger had set the group to achieve a 4.5 per cent profit margin on the current value of its fixed assets over a four-year period starting in 1980.
That period ends on December 31 and the projected figures for SBL indicate it will make a profit of only £774,000 within Grampian, compared with its target of £942,000.
A joint report by Tom Carter, director of finance, and John Westaby, director of transport, said the operating surplus is earned from all services operated by the SBG and include stage services, revenue support and non stage services, such as contract work, private hires, tours and express services.
The total mileage to be covered by SBG during the four years of the target period is expected to be 38m.
"During the four-year target period, passenger loss on rural services has continued and, in addition, surpluses made on express routes and contract hires, used to cross-subsidise rural stage services, have been materially reduced because of increased competition from private operators."