Stagecoach boss Souter to ask government for help

A bus tycoon who helped bankroll the SNP's election campaign is to ask the Nationalist government for a £3million subsidy for his company.

Representatives for Stagecoach boss Brian Souter, who donated £500,000 to the SNP war-chest, will meet officials this week in a bid to get public funding for a hovercraft service.

Critics of the funding push have warned First Minister Alex Salmond he should not give any "special favours" to his party's donors.

Stagecoach, which is expected to make at least £123m in profits this year, ran a hovercraft pilot between Kirkcaldy and Portobello in the summer, a trial that attracted around 32,000 passengers. The firm last month declared it had established a "clear business case" for a permanent service and announced a "four-part masterplan" for rolling out the plan.

A financial analysis carried out by Stagecoach suggested the service, in which it would invest £10m, could become commercially viable within three years.

However, Stagecoach has said a "total public investment" of £3.3m would be required if the firm was to push ahead with its plans.

Steve Stewart, Stagecoach's director of corporate communications, told the Sunday Herald the project was contingent on receiving the public cash and could not go ahead otherwise.

He added that company bosses will meet the Scottish government this month in a bid to secure the funding.

However, the issue is sensitive for the new government as Souter was the party's biggest donor during the recent Holyrood election.

His £500,000 donation, the biggest the party has ever received, allowed the SNP to compete financially with Labour and the Tories.

It subsequently emerged the party had accepted the cash after failing to include plans to re-regulate Scotland's bus network in its manifesto, a policy backed by SNP delegates at their conference last year.

One critic of the hovercraft talks said: "The SNP has to be very careful it doesn't give special favours to donors."

This week's talks are further evidence of the close links between Stagecoach and the SNP government.

As well as Souter's relationship with Salmond, the new government appointed Stagecoach's non-executive director Sir George Mathewson as the chairman of its council of economic advisers.

A Scottish Liberal Democrat spokesman said his party supported the hovercraft pilot, but added: "Any subsidy offered by the taxpayer would have to be properly explained as it will not be obvious to a sceptical public why a project with a proven market run by one of the world's most successful transport companies needs extra support."

A spokesman for Stagecoach said: "Any cross-Forth service is going to require some public sector investment. The funding mechanism is one of the issues we are going to be raising as part of our discussion with the Scottish government."

An SNP government spokesman said: "The Scottish Government already supports a range of transport services in Scotland to the tune of some half a billion pounds, and any additional services must be considered in the context of a tight spending settlement."