Mar 01 - Government Says It Has Achieved “Best Possible Deal On Buses”
The Government says it notes what it describes as “the latest hypocritical statements from the Opposition” on the matter of the Gibraltar Bus Company. Number Six argues that, considering what it calls “the astronomical financial burden” that the blue buses caused to the taxpayer as a result of the “poor decisions” of the previous administration, “it is unbelievable” that the Opposition now criticise the Government for removing this burden.
A statement issued yesterday evening continued: “As the Government made clear at the time, the decision to sell the blue buses was made on the basis that the cost of maintaining the fleet was so high that stopping this bleeding of public finances was an immediate and urgent priority. The Opposition will recall that these costs were spiralling year-on-year and amounted to £31,299 per month by 2011 instead of the £9,142 monthly maintenance costs for 2005.
“Significantly, the previous GSD administration estimated that the blue fleet would serve the public for 15-20 years. In fact, they lasted 10 years despite that the total cost of maintaining them during this time was £2.7 million; which is approximately what it would have cost the taxpayer to replace them with 10 brand new buses.
“To ignore these spiralling maintenance costs would have been a great disservice to the community. An investigation conducted by Minster Costa in 2012 made it clear that a culture of mismanagement and bad decision-making by the GSD administration meant that Gibraltar Bus Company was losing the taxpayer £2.3 million a year. This had to stop.
“The Government was left with no choice but to take the blue buses out of service and sell them as a way of putting a plug in the unnecessary drain on public finances that they caused. However, problems with the gear boxes, spare parts for which were no longer in production and thus impossible to acquire, meant that finding a buyer proved extremely challenging. The first offer from a Finish firm of £200 per bus was rejected by the Government for being too low and in consideration of the export costs that such a sale would have incurred. The only interested local company, Calypso, made an initial offer of £500 per bus. Further negotiations led to the final price of £15,000 for 14 buses, which was agreed by the Financial Secretary. It is important to note that many of these were beyond economical repair and engine problems have meant that Calypso has only succeeded to restore 4 buses to full working order from the 14 that they purchased.
“The Government learned an important lesson from the mistakes of the previous GSD administration; the buy-back clause agreed with the purchase of the red MAN buses now in service means that when the time comes, the Government can replace them in the most cost- efficient way possible for the taxpayer.”
Minister for Transport, Paul Balban, said: “It is absolutely unbelievable that the Opposition have chosen to criticise the Government for the sale of the blue buses. As it was at the time, the Government is once again being fully transparent with the reasons for the sale, which were primarily the astronomical maintenance costs involved. After consulting three potential buyers the Government had no choice but to make the best possible deal for the taxpayer. The Government also kept the two buses that could be used to train Gibraltarians as drivers, whereas before bus drivers had to be employed from outside. But we have learned our lesson from the mistakes of others and the buy-back clause on the red MAN buses that are now in service means that maintenance costs will never again be allowed to spiral out of control as they did up until 2011.”
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