Express Yourself

You have till 24 July 2009 to complete the first round of documents in the initial expressions of interest regarding Plymouth council’s potential disposal of its Citybus operation.

The council is looking to place a true value on Citybus and see what kind of interest it receives. Our view is that the interest and value will be high.

My guess is that the disposal advert would naturally have appeared in Transit magazine. That particular avenue is of little use now that New Transit has reduced from fortnightly to monthly. So, it appeared in routeONE (and in the Plymouth press).

Meanwhile, opposition to the sale grows, with a demonstration to be held tomorrow outside of the council chambers, and a petition said to have more than 15,000 signatures will be handed in at the next full council on 3 August when there will be a further protest. Protesters intend to ask questions of the council.

Citybus will now undergo an independent 'due diligence' audit in order to assess its value. The council will then share this sensitive commercial data with any interested parties. There are understood to be four so far, even before the advert appeared.

A letter in the local newspaper, The Herald, suggests that Citybus’ profit margin is 4-6 per cent whereas larger operators are content with not less than 15 per cent. The letter contends that significant extra subsidy would be required to operate services likely to be withdrawn upon a sale. This might include the significant number of double deck school buses Citybus supplies. The correspondent feels that the additional subsidy required could drain the sale receipts in as little as five years.

This, of course, is the “social dividend” argument. But one way or another, the council is “subsidising” loss making bus services—in this case, by accepting an unnaturally low dividend in exchange for the potential for a reduced subsidy bill.

And a reduction in subsidy is currently the Plymothian name of the game for, from today, the council introduces its cost-saving measures aimed at taking a £200,000 slice out of the bus service budget. Interestingly, the council has published a 32 page timetable showing all *subsidised* services only.

Those expressing an interest in Citybus will probably not be put off by such a swinging cutback.

In an unscientific survey here, three quarters of respondent felt that now wasn’t the right time to sell Citybus.

For more on the sale and cutbacks, see Plymothian Transit.