Bus firm is close to being sold

EASTBOURNE Buses is likely to have a new owner by the end of the year.

The financial state of the company is causing extreme concern and Eastbourne Borough Council, which owns 80 per cent, is in advanced negotiations with bidders.

Details of any potential deals are being kept under wraps because of commercial sensitivity but it is common knowledge that two companies are in the running - Stagecoach, which runs services in Hastings, and Go-Ahead, the firm behind Brighton and Hove Buses, which is the favoured option among Eastbourne Buses employees.

Unite, the bus workers' union has written to councillors expressing the staff's preference for Go-Ahead because of work conditions and a superior fleet.

The Herald understands one of the major sticking points is the cost of protecting the pensions of Eastbourne Buses staff.

Meanwhile, a political row has erupted after Eastbourne MP Nigel Waterson launched a petition to save the beleaguered bus company and raised concerns over the management and finances of the firm.

Mr Waterson said his concerns were growing because the future of the firm, the oldest municipal bus service in the world, was shrouded in secrecy.

"Some serious questions need to be answered," said the MP. "Why are the annual accounts late? How big an operating loss is the company making? Is it in danger of trading while insolvent? How great are its borrowings and are they guaranteed by the council taxpayers? How much does the company owe to Eastbourne Borough Council?

"These are all legitimate questions. No doubt council leaders will claim that any deal they come up with is in the interests of council taxpayers. But will that really be true? Could the company have been better run? Will it be sold at a knock-down price?

"Will the company be sold off piecemeal or as a going concern? Will existing routes be axed and fares rise? The elderly and other vulnerable groups who tend to rely on the buses could be hardest hit. We need answers and we need them now."

It is no secret that the company has run up significant losses in recent years, but has remained solvent because its assets - primarily the Birch Road depot and workshops - cover its liabilities.

It has faced regular criticism over the past two years following unpopular timetable changes, the axing of uneconomical routes and above inflation fare rises which the company said was due to spiralling fuel costs, competition from the Cavendish-Renown operator and difficulties in keeping to timetables because of traffic congestion on some routes.

As the row exploded this week, Eastbourne Borough Council leader David Tutt was reportedly furious at Mr Waterson's intervention, which he described as "unhelpful".

Councillor Tutt also said the bus company had suffered substantial losses during the last two years of the Conservative administration in Eastbourne and when political control changed in May 2007 the company was running on an unsecured loan of 150,000 from an executive director of the company.

He added, "Without this I do not believe the company would have been able to continue trading. That loan has now been repaid and the loss during the past year is less than that previously incurred but given the accumulated losses the position of the company is not sustainable."

"The council, together with the other shareholder in the bus company (travel company Keolis] have therefore sought a buyer by way of competitive tender. We believe this is in the best interest of both the employees of the company and those who travel on the buses.

"The issue of which routes will operate has not been something that Town Hall has had any control over since the point in time the then Conservative government under Margaret Thatcher took the disastrous decision to deregulate bus undertakings."

Cllr Tutt said Conservative leader at the Town Hall David Elkin had been kept fully briefed on all developments by the council's chief executive Martin Ray.

"Mr Waterson's intervention at this stage is not helpful and could both put jobs at risk and reduce the value of the bus company. Either he has failed to consult with his Conservative colleague before issuing his statement or at worst knows the position and has put his own political interests above those of Eastbourne."

Conservative leader David Elkin said things had escalated in the last year and added, "Our overriding objectives have been to ensure the best possible return for residents on this disposal of a council asset and that any monies raised are spent wisely and secondly and every bit as important, the maintenance of a quality bus service in Eastbourne after any sale.

"Unfortunately negotiations have dragged on and on and it is not surprising that residents are now starting to ask detailed questions on this issue and on the future and potential risk around Eastbourne Buses, of which the council is a major shareholder."

A joint statement released by Eastbourne Buses and Eastbourne Borough Council said, "Eastbourne Buses Ltd and its shareholders Eastbourne Borough Council and Keolis are working hard to secure a strong future of bus provision in the town.

"All are exploring in detail the best options to secure a long-term future for bus service and throughout months of negotiation all parties have prioritised the interests of service users as well as the futures of many long-serving staff at the company.

"Due to the nature of the negotiations and their commercial sensitivity they must be carried out in a confidential manner. An announcement will be made when a conclusion has been reached."