25 October 2009

CC clear Eastbourne purchase

In a decision received with a shock level not dissimilar to that of the Cosmen Consortium walking away from NEG at the eleventh hour, the Competition Commission (CC) did, on Friday, give the green light to Stagecoach's acquisition of both Eastbourne Buses and its main competitor Cavendish Renown. This despite signalling clearly that a "significant lessening of competition" has resulted.

The CC identified that Cavendish Renown had been operating a number of loss-making services during 2008 and this had "substantially deteriorated" its financial standing. Thus the CC believes that Cavendish Renown would have, by now, either have opted to withdraw large numbers of its routes or closed its business altogether; i.e. the competition would have substantially reduced in any case.

In its provisional decision, the CC had indicated that it would be willing to give clearance to Stagecoach provided one or more of the following restrictions were adopted: prevent Stagecoach from altering or reducing service frequencies and times of operation; remove the restriction Stagecoach had agreed with the owner of Cavendish Renown, which prevented him from setting up a new bus business in the area for a period no less than 3 years; to prevent Stagecoach from rising fares; and to potentially allow another operator to set up business in the Eastbourne Buses depot. None of these restrictions will be implemented now.

A Stagecoach spokesperson said: "We welcome today's announcement by the CC, which is the right decision for bus passengers in Eastbourne. Stagecoach has brought significant new investment to bus services in the area, ensuring that local people have access to a sustainable, comprehensive, high-quality and affordable bus network. We look forward to building on the improvements we have made and attracting more people to the benefits of greener, smarter bus travel in the future.”

They'll no doubt be hoping for a similar about-turn in Preston, though incumbent Preston Bus was no fledgling operator, certainly not by the standards of either two operators involved in the Eastbourne debacle! (GWB)