Infratil's NZ Bus to lose South Auckland contract

Friday 29th January 2016

Infratil's NZ Bus unit has missed out on a tender for South Auckland's public transport services, where it currently runs about 153 buses.

Auckland Transport advised NZ Bus it wasn't selected as a preferred bidder for any of the agency's South Auckland services which were put to tender last year, Infratil said in a statement. The company said it's still in direct negotiations with the local body agency to renew other contracts representing about half of its existing business in Auckland.

"Not being selected as a preferred tenderer in one of our incumbent locations is a disappointing outcome, particularly for our staff who work hard every day to deliver a high quality service and are part of the South Auckland community," NZ Bus chief executive Zane Fulljames said. "As an incumbent, we understand clearly the costs of operating in the South Auckland market and submitted a strong, high quality tender to reflect this."

Infratil's bus division generated earnings of $22.7 million in the six months ended Sept. 30 on revenue of almost $119 million, up slightly from a year earlier.

The South Auckland services make up about 14 percent of the Infratil subsidiary's national fleet of 1,070 buses, and will have a nine-month transition period to the new contracts, which NZ Bus said it will use to minimise the impact on its workforce.

Infratil shares last traded at $3.14, and have declined 4.4 percent so far this year.

BusinessDesk.co.nz

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