Infratil and Stagecoach

Stagecoach UK has sold its New Zealand bus operations to Infratil – the local utilities investment company. Nothing exciting there, except that Stagecoach was an exceptional owner of companies that local authorities had let run down over many years. There is little doubt that both Auckland and Wellington now have far more modern bus fleets, and better bus systems than they had when the ARC and Wellington City Council ran services as ratepayer funded monopolies.

Stagecoach NZ never paid a dividend to Stagecoach UK (despite what the NZ Herald report says Ross Martin claimed), although it did go for a good premium over the original purchase price – and rightfully so – Stagecoach poured a lot of money into new buses, albeit with some help from local and central government subsidies - around half of the services in Auckland were commercial - getting no subsidies at all. Certainly Stagecoach Auckland and Wellington are a far cry from the union run, antiquated Yellow Bus and Big Red bus fleets they took over from local authorities in both cities.

The government is reviewing the regulatory regime for public transport – this is in response to calls by some in local government to get rid of the right of bus companies to run commercial services. Some want bus companies to be regulated, and subsidised so that local authorities can control them. I suspect Stagecoach was fleeing a regulatory regime it saw as having potentially a limited life – which is a shame.

Infratil is a good owner though, and no doubt will do its best - but lest we forget what Stagecoach did for urban buses in Auckland and Wellington - it actually wanted to run them as businesses for customers.