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After a 14-year absence from the Dunedin urban bus scene, Ritchies Transport Holdings Ltd is promising 10 new buses, and the possibility of some former Christchurch Red Bus drivers, for the Dunedin contract recently awarded to it by the Otago Regional Council.
Dunedin City Holdings Ltd (DCHL) chairman Paul Hudson described the loss of the "significant" contract, worth about 20% of Citibus' business, "a concern" which would be discussed by the DCHL board.
Tenders for the bus contract - which included Logan Park High School and Dunedin North Intermediate to Pine Hill and Opoho, and King's and Queen's High Schools and Macandrew Intermediate to Lookout Point school routes - were submitted by Citibus, Dunedin Passenger Transport, Otago Road Services, Ritchies and Red Bus.
The Star understands Citibus' tender price was within $1000 of Ritchies' winning tender.
Otago Regional Council support services manager Gerard Collings said the first-year net value of the contract was $550,200 excluding GST.
Ritchies regional manager Malcolm Budd, of Dunedin, said the Auckland-based company was "absolutely pleased" to be awarded the eight-year contract which starts on July 1.
"It gives us another foot in the door in Dunedin," Mr Budd said.
"We will also be looking for charter work, which will build over time."
The 10 buses will come from a fleet of 23 low-floor coaches under construction.
The company will employ a driver-supervisor and nine drivers.
There have been inquiries from Dunedin bus drivers, and from drivers of Christchurch's Red Bus company which has been affected by last month's earthquake.
"It makes sense to take on drivers who know the route. But we want the right people to do the job."
Administration will be based at Ritchies' Intercity offices in St Andrew St, but the company is looking for space to park coaches.
Citibus general manager Tony Collins said eight of the company's 40 buses were currently used to service routes in the contract.
It represented a "significant bit of business" which the company would "need to look to replace".