Bus bosses frozen out of talks on merged tram firm

Published on Tuesday 29 September 2009 10:22

FEARS have been raised about the future running of the city's trams after bus bosses were frozen out of crucial planning for the project.

Lothian Buses is set to merge with tram company TIE in order to run the city's tram service.

But the bus firm said there had been "no direct contact" when the city council drew up a key report outlining the finances of the new company Transport Edinburgh Limited (TEL).

Critics said the admission raised further questions about the future of the city's ailing bus firm, which many fear will be left to pick up the bill when the trams struggle to make a profit.

Lothian Buses said there had been no discussions with the council because the "channel of communication" had been TIE.

Both TIE and the council said Lothian Buses had been involved in prior discussions which led to the publication of the TEL business plan – the document from which the figures in the August report were drawn.

The report showed transport bosses expect the trams to post a pre-tax operating loss of 4.1 million in 2012, leaving Lothian Buses to subsidise TEL.

One source today said the decision not to involve anyone from Lothian Buses prior to the drafting of the August report highlighted the fact the bus company faced a difficult future.

He said: "The council know there's little point in asking the turkeys what their view of Christmas is. The future for Lothian Buses will basically consist of having to find ways to pay for the tram losses. There will be service cuts and fare increases."

In an answer supplied under Freedom of Information laws, Lothian Buses said there had been "no direct contact" with the local authority, adding information on patronage levels had been drawn from its Outline Business Strategy for 2009, 2010 and 2011, "ie prior to the entry into public service of the Edinburgh tram".

The subsequent council report, published on 20 August, showed TEL is expected to make a pre-tax profit of 400,000 in 2012, rising to 15m in 2016 and 17m by 2021. The trams are expected to make a loss of 4.1m in 2012, before returning a 1.1m profit in 2016.

Earlier this year, Lothian Buses posted a 801,000 operating loss – the first in its 20-year history.

Mandy Haeburn-Little, director of customer services and communications at TIE, said: "While we can't comment on the discussions which may or may not have taken place between the council and Lothian Buses, we can categorically confirm that there were a series of discussions and subsequent input from Lothian Buses to the TEL business plan and, specifically, these discussions took place between TIE, Lothian Buses and TEL."

A council spokeswoman added: "The information used in the council report was taken from the TEL business plan, which included information from Lothian Buses."