26 Apr 2011

Deutsche Bahn Arriva prepares for spending spree

Deutsche Bahn Arriva has amassed a £2bn war chest to invest in bus and rail contracts and acquisitions over the next three years as it anticipates a wave of consolidation fuelled by the liberalisation of the European transport market.
A year after the British bus and rail group Arriva was bought by the German state-owned group in a £1.5bn deal, David Martin, chief executive of Arriva, said the combined business would be interested in competing for five British train franchises in the next 18 months. These include the East Coast service, currently in state hands, as well as contracts in Europe and the Middle East.
Cash-strapped local authorities in Europe are selling off transport services in a process expected to lead to the full privatisation of the market by 2018. Mr Martin, responsible for the combined group’s expansion outside Germany, said Deutsche Bahn would be a key player, growing to “three or four times the size in five years’ time”.
Given the fragmented nature of bus and rail contracts throughout Europe, he said most acquisitions would be “relatively small” bolt-on deals. But he also predicted there would be a wave of consolidation as companies seek economies of scale.
“There will just be three to four big transport groups in Europe in the next 10 years and Deutsche Bahn will be one of them,” Mr Martin said. “In the 1980s, the deregulation of the British bus market created 30 leading players; and that’s reduced to four. It will be the same with rail.”
The comments echo those made by Elliott Advisors, the activist US hedge fund, which has argued that National Express should consider a merger with a rival such as Stagecoach to give it the firepower needed to compete in the consolidating European transport market.
“There is so much money going round, it’s green fields right now,” added Mr Martin. The company, which employs 47,000 staff in 11 countries, said it had expanded its order book by 2.2 per cent to €11.9bn (£10.4bn) and won contracts in Malta, Denmark and the Netherlands.
Arriva merged with Deutsche Bahn after takeover talks with the French SNCF collapsed. Meanwhile, Veolia and Transdev completed a deal earlier this year.

19 Apr 2011

Buenos Aires: Indefinite strike against new bosses

An indefinite strike by workers on an iconic bus route affected a quarter of a million passengers on Monday, union officials said. The 1,340 employees of the number 60 bus route in the Argentine capital are seeking to improve working conditions which have deteriorated since the takeover of the line by the Dota group last year, said union official Angel Peticaro. He claimed employees had been deducted holidays even when they showed up at work. "Given the refusal of management to talk, the strike was the only solution." The number 60, which crosses the South American megacity from south to north, has inspired many artists and even a TV series since it began in 1931.

14 Apr 2011

Attempted coup at National Express

A giant American hedge fund yesterday claimed a huge victory in its attempt to get backing for a coup at National Express. New York investor Elliott Advisors said Spain's Cosmen family - major shareholders in the coach and bus operator - supported its move for a boardroom shake-up.
This makes it more likely Elliott will get its way and hand-pick three new directors for the board at the firm's AGM next month. It threatens another row over the influence of "greedy" hedge funds on corporate Britain. Elliott was founded by billionaire Paul Singer, a former donor to ex-US President George W Bush.
An industry source told Sun City: "They feel National Express has done a great job under chief exec Dean Finch... But now they think that the group are not being ambitious enough about where they take the business over the medium term."
National Express has returned to form after having to hand back the East Coast rail franchise to the Government in 2009 after huge losses. In February it unveiled a 38 per cent leap in annual profits. But the firm was not even shortlisted for the new East Anglia rail franchise, despite being the current operator.
Elliott and the Cosmens each hold 17.5 per cent of National Express shares. National Express last night urged other shareholders to stand by management.

Souter buys up Turkish public transport

Souter Investments (SI) – the investment vehicle owned by Stagecoach Group founder Brian Souter – and three Turkish partners have won an auction to buy the Istanbul ferry company IDO from the government for $861 million (£527.3m). The company operates 52 vessels on 19 lines. Because of Istanbul's congested roads, many commuters use the ferries to get around. Besides IDO, the Turkish government is also privatising many of its other assets, including highways and bridges.
In early March, Souter decided to withdraw from the bidding for the Gourock-to-Dunoon ferry route to concentrate on the eastern European transport market. He also runs Fullers Ferries, the leading ferry company in Auckland, New Zealand. 

Quebec drivers reject cuts

Bus drivers in Longueuil, Quebec, could take strike action on April 28 if little progress is made in negotiations with their employer. Seven-hundred drivers with the Reseau de transport de Longueuil (RTL) have been without a contract for 16 months.
The union is upset with the company’s demands for more than $1 million in concessions. Much of the anger stems from proposed cuts to family leave. At a general meeting on Sunday, members voted in favour of pressure tactics.

6 Apr 2011

Sit-down protest over bus cuts

More than 50 people took part in a sit-down protest over cuts to bus routes in Wellingborough, Northamptonshire, on Thursday of last week. Pensioners, students and others who use the W3 bus surrounded it and chanted slogans against cuts. Some sat in front of the bus to stop it moving. Meanwhile, in Cirencester, Gloucestershire, a pensioner chained herself to the number 855 bus in protest at cuts.

4 Apr 2011

Italy: transport workers strike together

A 24-hour strike by local transport workers paralyzed Italian cities on Friday with buses, trams and metro rail systems all affected. Marcello Panettoni, head of a coalition of unions representing transport workers, accused local government agencies of starving public transport of funds. The unions are protesting budget cuts and the lack of a new contract.
Officials said the strike involved the entire country except the island of Sardinia. Massive traffic jams were reported on Rome's major arteries. Local transport officials in Milan said its three metro lines were not running and more than 60 percent of bus and tram drivers did not report for work. In Naples, fewer than one-third of local buses were on the street,