Much of the debate on bus reregulation has focused on whether operators or councils should decide who can operate buses in a particular location, to what standard and for what price. But why is it that we hear repeated calls for reregulation of “vital” bus services and not for (even more vital) food retailers like Tesco? What is different about buses that means they are subject to a perpetual tug of war between pro- and anti-regulators?

I wrote an article in Transit Magazine published in June. It suggests that buses are a monopoly and so the solution applied to network monopolies are appropriate (i.e. “unbundling”). Smart cards available over the whole network are one way that this could be achieved.

The Sunday Star Times reports that Infratil’s network related investments are suffering. In particular increased regulation could affect the value of Wellington International Airport.

However, the same problem is not likely to affect Infratil’s bus investments. Infratil bought Stagecoach’s New Zealand operations for $250 million. At the time, Stagecoach’s Brian Souter said one of the reasons for pulling out of New Zealand was the increasing threat of regulation.

Regional Councils are lobbying the Government to give them greater powers to control bus services. Councils want this so that they can introduce such things as integrated ticketing, which they have largely failed to do in the 15 years since bus services were deregulated.

The likely result of this regulation is that councils will negotiate with bus operators for the provision of services under an “open book” policy. With no incentive to improve efficiency, subsidies will go up. And with no competition, Infratil will do well. However the focus on passengers’ needs - to the extent there is one - may well be lost.

Still all of that seems to be a price that the councils are prepared to pay.

In New Zealand, Intercity Coaches is complaining that council subsidies are competing with its own services - which receive no subsidy from councils. The complaint states that councils are increasingly putting city to city services up to tender - having ignored city to city travel for years. Maybe the fact that InterCity charges up to $26 for the trip between Tauranga and Rotorua (an 80 minute journey), has something to do with Environment Bay of Plenty subsidising another service. Aucklanders might pay $7 for that kind of trip, and less if they bought a monthly ticket!

No wonder so many Kiwis travel by car!