Green light for Manchester franchising process

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Rotala, which owns Manchester-based Diamond Bus North West, has lost its appeal against the introduction of franchising into Greater Manchester

Rotala has lost its appeal against the decision of the High Court in the ongoing saga of the introduction of bus franchising in Manchester. In March , the High Court made a judgment that the Mayor of Greater Manchester’s decision to implement a bus franchising scheme across Greater Manchester was lawfully carried out, as were all other aspects of the franchising process. This judgment was appealed by Rotala, but the Court of Appeal unanimously rejected the appeal and upheld the original decision of the High Court.

Andy Burnham, Mayor of Greater Manchester, said: “This is brilliant news for the people of Greater Manchester – and for anyone across the UK who cares about having a bus service that puts people ahead of shareholder profit.

“We were always very confident that GMCA had followed all correct legal processes and that the decision to franchise buses and bring them under public control was lawful and right. We’re delighted that we have comprehensively defeated the last legal challenge in the way of bringing buses under public control. The Court of Appeal’s judgment upholds the original decision of the High Court and unanimously rejects this appeal as without any merit.

“Throughout two separate consultations, the Greater Manchester public told us that they wanted buses bringing under public control and run for the benefit of the people; and it’s frustrating that this legal action has been pursued to prevent this going ahead. So I’m delighted that the court has dismissed all the operator’s arguments and has awarded all costs in our favour.

“We have already started to deliver the bus service that the people of Greater Manchester want and deserve. From 1 September this year, we’re introducing capped single bus fares of £2 for adults and £1 for children and a £5 day ticket, which will simplify the confusing, complicated and expensive set of tickets and fares we currently have across the city-region. We’re also investing in 220 zero-emission buses, with 50 of those as part of the first phase of franchising in Wigan, Bolton and parts of Salford from September 2023. The second and third phases of franchising will be Bury, Rochdale and parts of north Manchester in Spring 2024; and the final phase will cover Stockport, Trafford, Tameside and South Manchester by end of 2024.

“This clear and unanimous judgement is another green light which means that we can now power ahead at full speed to deliver bus franchising across Greater Manchester as part of our Bee Network: an integrated, accessible and affordable ‘London-style’ transport system joining together buses, trams, cycling and walking.

“And I hope that the unanimous rejection of this appeal paves the way for other city regions such as Liverpool City Region and South Yorkshire to progress with their ambitions to bring buses under public control.”

A statement by Rotala said: “The Company has considered the Court of Appeal’s judgement in its claim against GMCA and the Mayor and, whilst disappointed with the result, it respects the decision of the Court and has resolved to take no further steps in this legal process. GMCA has already announced mechanisms which cover the acquisition of bus depots and bus fleets under its franchising proposals.

“The Board has reviewed these mechanisms and is confident that, should it decide to place the Bolton depot and its associated bus fleet assets under these mechanisms, the values which would be realised from the sale of Bolton depot and its related bus fleet should meet or exceed their respective book values. These amounts should also be more than sufficient to pay off the existing mortgage on the Bolton depot and the hire purchase debt associated with the bus assets based there.

“As a result, the sale of these assets to GMCA, should it take place, would have no negative effect on the Group’s balance sheet and its leverage would fall to very low levels. The capital which the Group currently has invested in its Bolton operation would therefore be realised into cash and be available for re-investment or redeployment elsewhere in the Group.”

Rotala will be able to recover the value of its assets should GMCA seek to acquire its Bolton operations, the firm said in a statement. JONATHAN WELCH