IFT - Infratil

[Zaphod]

The lines are getting ripped out. Look at the press release and they meantion being able to use the refitted buses anywhere - so if they lose the Welly contract, they can move the to Auckland (assuming they win some there).

The big issue NZ Bus will face if they move the vehicles to Auckland is that they will not currently receive a higher subsidy from AT for using these vehicles. The GWRC provide a higher subsidy rate (and additional incentives) for tenders pertaining to the existing trolley bus service and presumably, the new electric bus service. The only other council that provides similar subsidies is the Waikato Regional Council who require CNG buses to be used on some urban routes.

Charging infrastructure will also be a greater issue as routes in Auckland are generally longer than those in Wellington.

Still, it's great to see some positive actions being undertaken to move away from diesel buses.

[Lewylewylewy]

Didn't they lose an Auckland contract recently? I thought there was no more opportunity there for a while?

[couta1]

Couta1, did u pick up at 3.25?

I chased the price down from $3.28 to $3.24 (Average buy price $3.26 to date for around 98k shares) IMO this is one of only a small number of companies on the NZX that are currently value buying with upside and increasing divvys, how are you going with your buying?

[King1212]

I chased the price down from $3.28 to $3.24 (Average buy price $3.26 to date for around 98k shares) IMO this is one of only a small number of companies on the NZX that are currently value buying with upside and increasing divvys, how are you going with your buying?

No no fund available..gutted....!

[Harvey Specter]

Didn't they lose an Auckland contract recently? I thought there was no more opportunity there for a while?

That was in South Auckland. The whole of auckland is to be re-tendered over the next 2 or so years. The West and central are big for NZ Bus, north shore not so much.

I have read another story on the electric buses and the battery packs are apparently bigger than I referred to above. They will still have a ICE engine but the battery will be big enough to run for long periods and as battery tech improves, the ICE may be replaced with just batteries.

[peat]

Using figures from the 2015 accounts the buses contribute about 12% by revenue and 6% by profit

The conversions are hybrid for sure, but will allow quiet emissionless running at times , so good at busy intersections with pedestrians etc.

[Bjauck]

Didn't they lose an Auckland contract recently? I thought there was no more opportunity there for a while?

My impression is that Auckland Transport, Unions and NZ Bus have a somewhat fractious relationship as a result of contract issues etc.

[Harvey Specter]

The conversions are hybrid for sure, but will allow quiet emissionless running at times , so good at busy intersections with pedestrians etc.

It will be interesting to know how smart the technology is. ie. are the geo fenced areas where it always runs on batteries (ie. in the CBD), does the generator turn on regardless of charge when the bus is moving quickly as fumes less of an issue, are routes programmed in so it knows not to charge if its just about to go to bed for the night. probably A topic for TransportBlog rather than here though.

Edit: from the NBR:

The Wrightspeed technology also allows for “geofencing,” or programming buses to run solely on electricity on different parts of any particular route.
The technology also allows for the buses to be converted completely to electricity, once battery technology has sufficiently improved, and that was another reason for choosing to go with Wrightspeed, Mr Fulljames says.

[artemis]

My impression is that Auckland Transport, Unions and NZ Bus have a somewhat fractious relationship as a result of contract issues etc.

Bus drivers do often seem to be in dispute with employers. The south Auckland tenders, 4 of them I think, have gone to Go Bus which is iwi owned. There was a lot of discussion at the time that the iwi owners had a significant tax advantage over non iwi owned companies and that this may have reduced the level of competition. Although there is a tax advantage we, the public, will probably never know for sure how much impact this had in the tender pricing.

It will be interesting to see what industrial action, if any, pops up under the new ownership. am I cynical in thinking not much? Possibly the iwi owners will be under pressure to improve pay and conditions which may impact profitability over time. Especially as they have committed to a lot of capital expenditure.

[Harvey Specter]

Artemis - the tax advantage may not be public but it is known - 28% of expected profits. What we dont know is if they have a lower cost base, or their profit margin requirement lower that also allowed them to price lower. or it could just be their lack of knowledge led them to price lower - NZ bus would have had the most info on the routes. From what I have heard, those in the industry are not sure how Go Bus will make a profit as the price was seen as too low for bad routes (Shorter, lower patronaged routes).

Go Bus workforce is also less unionised and (partially) as a result, have worse conditions and lower wages which would have lowered their cost. Whether that will last for the term of the contract 6-12 years, who knows, especially if they have to hire lots of formerly unionised NZ bus employees.