NZ Bus jobs at risk as new operator wins Wellington contracts

Wellington busses will stop this month as drivers attend stop-work meetings.


Wellington busses will stop this month as drivers attend stop-work meetings.


Shell-shocked bus drivers working for Wellington's NZ Bus are contemplating their future after the company lost the contract for most of the city's bus services.

Masterton-based Tranzit Group has been named the preferred tenderer for 60 per cent of the services from mid-July next year.

In Kapiti, Palmerston North company UZABus has been selected over Porirua-based Mana Bus.

Infratil-owned NZ Bus has around 500 drivers in Wellington, plus 150 workshop and administration staff. 

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No official comment was available from the company but in a statement to the NZX, chief executive Zane Fulljames said the firm had expected to lose some work.

Under GWRC rules, no one could hold more than 60 per cent of services in the region. 

NZ Bus currently held 73 per cent of the routes, so it was "inevitable that we would hold fewer contracts".

The company, which runs the Go Wellington, Airport Flyer and Valley Flyer services, retains about 28 per cent of the services.

But those routes are up for direct negotiation rather than tender.


Greater Wellington Regional Council (GWRC) presides over regional bus services and said the changes would be good for Wellington ratepayers.

Chairman Chris Laidlaw said the new operators would save the council several million dollars a year, paving the way for possible fare discounts.

They would also improve the environment with newer buses, and provide work for a local bus builder.

Tranzit has offered to take 380 staff in Wellington, but Tramways Union spokesman Kevin O'Sullivan said he was concerned they would be paid at a lower wage.

Industrial action was possible.

"We're not going to sit back and just let it happen. The Tranzit rate is $19 an hour flat, there's no overtime or anything else. That's nearly $3 an hour less than what our members are being paid."

But Tranzit managing director Paul Snelgrove said its hourly pay rates in the Wellington region ranged from $19 to $22.

"We obviously know there is a cost of living in Wellington which is different to the Wairarapa."

Snelgrove said the contract was a real boon for the family-owned Tranzit, which plans to build 228 new buses.

It would keep as much of the work within New Zealand as possible, he said.

"Buses range from anything as low as $350,000 ... up to $600,000 for a double-deck one, so anywhere between those ranges is what we're going to be spending."

Laidlaw said major improvements were coming for the region's public transport system, including wheelchair accessible buses, double-decker buses down Lambton Quay, and a single integrated ticket system.

He said the tender process included an expectation that operators acted as good employers.

"We fully expect that to be honoured."

Wellington Chamber of Commerce chief executive John Milford said the changes were a win for ratepayers, and also for local company Kiwi Bus Builders which stood to win work from Tranzit.

"That's really keeping it local, and we applaud that attitude."

A spokesman for electronic ticketing system Snapper said commuters would still be able to use their Snapper cards on the new buses, and the company would still be the supplier of the new one-card system to be introduced on all Metlink bus services from early next year.

 - Stuff


Infratil puts NZ Bus under microscope

Infratil, fresh from losing the bulk of its Wellington bus contracts, is running the rule over its NZ Bus business and it could be sold or merged.



7 February 2018

Infratil, the publicly listed infrastructure investor, has begun a strategic review of its ownership of NZ Bus after concluding negotiations for contracts for Wellington and Auckland commuter services valued at $1.3 billion.

It will engage with market participants over the coming months and proposals may include outright sale, merger or other options, chief executive Marko Bogoievski says.

The aim was to maximising value and employee and other stakeholder outcomes and was expected to be completed within six months, he said.

Infratil agreed five long-term contracts in Wellington last month and secured 20 long-term contracts in western, central and northern regions of Auckland last October.

The Auckland contracts are for an average nine years and have a total value of $1b while the Wellington contracts average 10.8 years and have a value of about $323 million.

Last year, Infratil said NZ Bus's loss of certain public transport contracts meant it would shrink to about two-thirds its original scale, with 75 per cent of the business in Auckland and 25 per cent in Wellington.

In May 2017, NZ Bus lost most of its bus contract with the Greater Wellington Regional Council to Masterton-based Tranzit Group, which the council said could offer the service cheaper, reducing its share of services to 28 per cent from 73 per cent.

Infratil has retained UBS New Zealand as an adviser for the review.

Infratil shares fell 2.3 per cent to $3.03.


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