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SBG hopes looking grim

5th May 1988, Page 16
5th May 1988
Page 16
Page 16, 5th May 1988 — SBG hopes looking grim
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Which of the following most accurately describes the problem?

• The Scottish Bus Group's hopes of becoming the National Freight Consortium of the North look like being dashed within the next two weeks.

The SBG, which has 12 subsidiaries, wants to be privatised as a single company owned by its management and employees, but Scottish secretary Malcolm Rifkind and his colleagues have yet to be persuaded and are leaning towards breaking it up into four or five separate companies.

The decision on the future shape of the industry is likely to come soon — possibly ahead of the Scottish Conservative Party Conference in mid May.

The SBG does seem to have convinced the Scottish Office that to privatise the group in its existing form would leave many of the subsidiaries vulnerable, particularly to the municipal bus operators. There are fears that the regional councils, particularly Strathclyde, could use their financial muscle to drive the subsidiaries out of business.

The SBG is still trying hard to persuade Rifkind that the size of a single company would not affect competition. It has argued that in England and Wales competition has been created by deregulation, rather than by the privatisation of the National Bus Company into small parts.

The issue of who will own the privatised company has also been muddied by the declared interest of Frontsource, which owns 10 former NBC subsidiaries, and RI, the Western European representatives of the Hungarian company Ikarus — the world's biggest bus producer.

This option would appear politically to be a non-starter. The Government's opponents would make political capital out of the fact that a state-owned industry had been privatised, only to fall partially into the hands of a communist bloc country.


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