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New fears over rural bus services

 
Created on 01/02/2011 @ 14:26
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Montgomeryshire can breathe a sigh of relief - for now at least – after it was confirmed French operator Veolia cannot break its watertight contract to maintain its current bus services until 2012.
 
Concerns have grown this week after the company ended services in Eastern England as part of a cost-cutting programme and industry analysts have predicted that rural Wales could be next.
 
But Powys County Council has confirmed today that Veolia, which has the contract to run routes through many local towns and villages, is bound to a watertight contract until 2012 as part of a five-year tender awarded in 2007.
 
“The only way they can get out of it is if they went bankrupt,” said a council spokesperson. “Veolia won a number of Montgomeryshire school routes and subsidised bus routes in 2007 and we expect them to honour that agreement until it is out for tender again in 2012.”
 
Veolia is believed to have undercut local bus operators to win the five-year contracts but later sub contracted the routes back to local operators whose buses are seen on local roads.
 
Routes throughout Montgomeryshire run at a considerable loss but are subsidised by both the Welsh Assembly Government and Powys County Council in a bid to maintain rural services.
 
However, they are set to come under the microscope in the coming months as Wales looks to tighten its belt, with WAG announcing a 9% budget cut for local integrated transport in 2011-12.
 
Chris Cheek, bus analyst with transport consultants TAS Partnership, said: “Potentially there are implications for Wales. I don’t think it’s any secret that Veolia have struggled with some of the Welsh operations.”
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