North Shore buses at the crossroads?

The collapse of Westbus has raised serious concerns that other private bus companies could soon follow suit, including the two main North Shore operators Forest Coachlines and Shorelink.

Westbus, the state's biggest private bus operator, announced its decision to move into voluntary administration early last month, sending shockwaves through an industry already beset by uncertainty and financial strain.

Since then private operators, represented by the Bus and Coach Association (BCA), have been holding crisis meetings with the State Government which have highlighted just how precarious the position of some other companies is.

The meetings have also underlined widespread industry dissatisfaction with the government's bus reform agenda. The controversial reforms, started by then Transport Minister Michael Costa in 2003, are aimed at simplifying Sydney's complex private bus company contract system and streamlining services, but, according to Executive Director of the BCA, Daryl Mellish, there are grave concerns the new system

"will leave operators totally unprofitable".

Forest Coachlines and Shorelink have expressed their dissatisfaction with the reforms by refusing to sign a new contract with the government, meaning their futures are uncertain. And, although negotiations are ongoing, it is unclear whether either company will reach a suitable compromise with the government by the 31 March deadline.

Spokesperson for Forest Coachlines, David Royle, says he is "optimistic" a suitable outcome would be reached before the deadline, but admitted Forest is making contingency plans "in case we don't have a contract in place by [then]".

"We have not ruled out the Westbus option," he says.

Forest, which is celebrating its 75th anniversary this week, has a fleet of 70 buses and employs about 100 people. It typically carries a little over four million passengers a year across the upper North Shore.

A spokesperson for Shorelink, which runs 85 vehicles across 22 North Shore routes and carries more than two million passengers a year, was tight-lipped, saying it would be inappropriate for the company to comment on its status while negotiations are still underway.

He assured the Sydney Observer, however, that Shorelink is "not at all in a similar position to Westbus".

But spokesperson for the Transport Workers' Union (TWU), Angela Humphries, believes Shorelink is one of seven of Sydney's 21 private bus companies considered to be at high-to-medium risk of financial failure - Westbus was another.

"We have no direct evidence that [Shorelink] is

in financial trouble," Humphries says. "But they have not signed their new contract with the government, which, of course, was the direct precursor to what happened to Westbus."

Humphries says there is other anecdotal evidence to suggest Shorelink is in trouble, but is unable to elaborate.

Humphries says poor fleet condition and declining maintenance levels offer a reliable indication that a bus company is facing financial difficulties.

The Sydney Observer visited the Shorelink depot in Mt

Ku-ring-gai last week and found the company operating at absolute capacity. Three buses were inoperational at the time leaving none spare, meaning even a single breakdown could have seriously disrupted services.

Such a scenario is not uncommon, according to Shorelink maintenance staff.

Humphries also says Shorelink's multinational backing (Shorelink is owned by European transport giant Transdev) does not make it immune to the industry's woes.

"It's natural to think that [multinational backing] would auger well for them, but [UK company] National Express is the parent company of Westbus, and that didn't save them," she says.

She believes the new contract offered to Westbus by the State Government hastened its downfall by rendering it unprofitable, which alarmed National Express.

"When National Express saw the contract they quickly realised Westbus couldn't be financially viable so they called in an internal debt [of $90 million]," Humphries says.

According to the Transport Minister, John Watkins, the collapse had nothing to do with the reform agenda: "The industry is going through a period of change...which may be unsettling for some operators," Watkins told the Sydney Observer. "[But ultimately] our reforms will provide more financial stability to private bus companies in NSW."

Mellish, however, says that unless the government makes

the new contract system more attractive to private operators, negotiations are likely to remain deadlocked and the status of private bus companies is likely to remain uncertain.

"And if that happens you'll see more companies starting to give notice to cease trading [and] that would mean a great reduction in buses for commuters to catch. Simple," he says.

At the time of writing, two months after the initial deadline for the new contracts to be in place, only one of Sydney's 21 private operators, Connex, which operates in Sydney's south, has so far signed on.