Wednesday 11 February 2015
Environment Department response to media enquiry from Guernsey Press.
Guernsey Press Enquiry:
I know this is short notice, but can you check something for me.
The department has previously said that CT Plus' £2.65m. subsidy would increase to £4.4m., in return for a radically improved and free bus service. However, with the change of situation for free buses, will the subsidy remain at £2.65m in the new contract?
Response:
Under the new contract there is no bus subsidy at all. The subsidy under the old contracts essentially covered the gap between operational costs including profit and captured income. The subsidy was fixed and the operator took the risk if costs increased or income decreased.
Under the new contract the operator is simply quoting a sum to provide the specified service in the same way that any construction company quotes a price to deliver the construction. In neither case is a subsidy given but rather a contract sum paid for the service provided.
Under the new contract any fare income accrues to the States not to the operator. Thus the fixed contract price remains unaltered. If a fare is charged then clearly the States has additional funds with which to meet the contract sum. If a fare is not charged then the States must find the contract sum from other sources.
Contact Information:
Steve Smith, Chief Officer
Environment Department
Tel: 717200
