Falkirk bus plant celebrates second multi-million pound deal this week

BUS builder Alexander Dennis has received a further multi-million pound boost following an order for 520 buses and coaches to be deployed across the UK operations of Stagecoach.

The engineering group will build more than 400 of the vehicles in a deal understood to be worth about 40 million. Most of this work will be carried out at its headquarters in Falkirk, where the company employs roughly half of its 2,000 global staff.

The news follows the announcement earlier this week that Alexander Dennis has entered the New Zealand market for the first time via a 25m order from NZ Bus in Auckland. That deal, for 120 vehicles, is expected to pave the way for further expansion in the Antipodes.

Bill Simpson, corporate affairs director at Alexander Dennis, said: "Coupled with the New Zealand order already announced, this is a very good start for 2011."

Stagecoach, controlled by founder and chief executive Brian Souter, said yesterday that it would buy 360 buses and coaches as part of the annual replacement programme for its fleet of 8,100 vehicles throughout the UK. The Perth-based bus and rail operator will lease a further 160 vehicle for its London operation, which it re-acquired in a pre-pack administration from Australian bank Macquarie in October of last year.

Alexander Dennis will build both chassis and body for 127 Enviro200 midi buses, plus the chassis for a variety of other single and double-decker Enviro models. Stagecoach will spend a total of 52m on the new buses, plus a further unspecified sum to cover its leasing commitments.

Alexander Dennis is Europe's biggest provider of hybrid electric buses, and was already working on a number of these for Stagecoach. The transport operator announced last year that it would deploy 47 electric-hybrid vehicles in Sheffield and Newcastle, plus a further 17 in Scotland.

Les Warneford, managing director of Stagecoach's UK bus operations, said: "Minimising carbon emissions is a key factor in our investment programme. We want to play our part in reducing the impact of travel on the environment."

The two companies are linked via Souter, who was one of a consortium which rescued Alexander Dennis from the collapse of parent company Mayflower in 2004. His stake in the bus builder, held through private vehicle Souter Investments, is said to be nearly 38 per cent.

Business between the two firms dates to decades before that, but Simpson said there was no room for complacency on the part of Alexander Dennis.With the UK market for buses down by 35 per cent between 2009 and 2010, every order is crucial.

"Every year you have still to fight tooth and nail for every order," he said.

This latest deal means that Stagecoach will have spent nearly 290m on vehicles over a four-year period.

The first of the new buses will be ready later this year, with all expected to be in service by April 2012.