In a major Dunedin City Council asset sale yesterday, Citibus
was offloaded to an Invercargill-based company which already
operates buses in Dunedin.
The council announced a "conditional agreement" to sell the
assets and business of Citibus late yesterday, but few
details of the sale itself were revealed.
Invercargill Passenger Transport Ltd director Tony Baas
declined to comment last night when asked about the sale, and
Citibus and Dunedin City Holdings Ltd (DCHL) chairman Paul
Hudson would not give further details until staff had been
But the news appears good for employees of Citibus, which is
owned by the council through its holding company, DCHL.
Citibus driver and New Zealand Tramways Union Dunedin branch
president Bill Simpson said last night employees had been
told they would keep their jobs under the same terms and
"The guys can relax a little bit."
But Dunedin South Labour MP Clare Curran criticised the sale
yesterday, saying public transport was a public service, not
a profit-making venture, and she would believe the promises
given the drivers when she saw them.
The sale follows weeks of rumour and, more recently, concern
among Citibus employees about their future.
Late last month, the council had a non-public meeting to
discuss "Dunedin City Holdings Ltd matters", a meeting that
was later revealed to have been a discussion about the sale
On Friday, 65 drivers were given a letter saying the company
wanted to change the terms and conditions of their
Then yesterday afternoon, the council sent a press release
announcing the conditional agreement.
It said Invercargill Passenger Transport Ltd, which trades in
Dunedin as Dunedin Passenger Transport, was a
long-established bus transport operator in the South Island.
"Both parties have undertaken to do their best to satisfy the
conditions within the contract and work towards a seamless
transition that will have no impact on the regular users of
bus services in Dunedin."
It was anticipated settlement of the contract could occur
before June 30, offers of employment would be made to all
existing staff, and buses would operate current timetables on
existing routes as normal.
The press release said as a matter of overall strategic
direction, board members were of the view they could achieve
a greater return by withdrawing an investment from Citibus
and placing it within the other businesses of their group.
Dunedin Mayor Dave Cull said DCHL had raised the idea of
selling the company that was "haemorrhaging money", and the
council had voted to endorse that.
He would not release the price paid, as the deal was still
Cr Hudson said last night the companies were still in a
confidential negotiating situation.
Asked what would happen to the $4.05 million the company owed
the council at the end of last year, Cr Hudson said debt -
and interest - were "a normal part of running a company".
Citibus recorded before-tax losses of $806,000 in the past
Ms Curran said the only way a private company would be able
to make money would be to raise prices for customers or cut
"In this environment, anything that costs people jobs is a
Mr Cull responded last night people needed to differentiate
between the ownership of a bus operation and supervising a
public transport system.
The Otago Regional Council ran the public transport system,
not the city council.
Just because Citibus lost money did not mean there was a
benefit to the travelling public.
Other companies ran the same service with the same fares as