ONE of the west of Scotland's biggest bus companies is to be investigated by the Competition Commission following a deal that gave it control of nearly 70% of services operating in one area.
The Office of Fair Trading (OFT) announced it had referred the takeover by McGill's Bus Services of rival operator Arriva West last December – thought to be worth more than £10 million – to the market watchdog as it had created a monopoly on sections of some routes.
The deal, the latest in a series of takeovers, doubled the size of McGill's fleet to 320 buses and saw it gain a dominant position in the Renfrewshire area.
It is the first time the OFT has referred a bus company to the Competition Commission since a two-year inquiry into the local bus services by the commission concluded last December that a lack of competition was costing passengers across the UK up to £300m a year.
Its decision was welcomed by Paisley and Renfrewshire North MP Jim Sheridan, who referred the case to the OFT. "For a lot of people in my constituency there are no train stations and so no alternative to taking the bus. I hope this leads to greater competition being introduced in Renfrewshire," he said.
The move was attacked by McGill's, which said it would lead to higher fares for passengers due to the legal costs, expected to reach up to £500,000, for representing the company during the six-month investigation, which is due to conclude on October 2.
Ralph Roberts, the company's managing director, said that, had the merger not taken place, Arriva West, a company he previously worked for as MD until 2010, would have had to consider withdrawing services, putting up fares or even exiting the market entirely as it was "barely profitable".
Explaining the OFT's decision, Ali Nikpay, the senior director in the case, said: "Where local competition exists, the OFT will look carefully at mergers between rivals that have the potential to result in price rises or a reduction in journeys for passengers."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article