Tees Valley Combined Authority (TVCA) is commissioning an initial feasibility study into bus franchising.
The £150,000 study will explore the operating costs and revenues of the area’s bus network and provide an “unambiguous understanding of the level of financial surplus/deficit”.
The work will also consider whether any existing surplus represents a “fair return” to bus operators and what benefits any “excess profits” could buy for the conurbation, such as lower fares or more services.
Mark Wilson, TVCA’s head of transport, told the area’s transport committee that the combined authority was keen to avoid spending “significant time and resource on a project which may prove not to be affordable or suitable for the Tees Valley”.
“However, balanced against this is a need to either understand if a bus franchising proposal warrants more significant investment from TVCA or for the TVCA to provide evidence why it has chosen not to actively pursue franchising.”
Wilson said initial estimates, based on work undertaken in other areas, suggested that developing, consulting, procuring and making a bus franchise scheme could cost up to £4m. He said the figure was subject to high uncertainty. “While high, these costs could in theory be recouped over the lifetime of the franchise, which initial estimates suggest could generate £400m in revenue over ten years.”
The CA is also exploring partnership working with operators. Wilson said the Tees Valley Bus Operators Association would be putting forward a first draft of a partnership proposal in November, providing the starting point for negotiations between the operators and the CA.
He added: “It is also proposed that the two major bus operators [Stagecoach and Arriva] will work with the local authorities to develop two practical examples of how the partnership approach can bring real benefits to all parties.” The pilots will look at how improved efficiency on two corridors could free up resources to meet council objectives.
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