Probe into bus buyout
Published: 27 Apr 2012 12:30
The Office for Trading has referred McGill's to the Competition Commission after it took over the running of Arriva Scotland West buses in a £10million buyout last December.
Watchdogs have been ordered to investigate the firm amid concerns the merger means there is no rival competitor in areas across East Renfrewshire, Paisley and Renfrewshire - potentially in breach of competition rules.
The area under scrutiny involves bus services in Renfrewshire after McGill's assumed the running of Arriva's depots in Johnstone and Inchinnan.
The takeover meant McGill's added another 165 buses to its fleet in addition to almost 200 coaches it already operated from its base in Greenock, as well as its Muriel Street depot in Barrhead.
Ali Nikpay, a Senior Director at the Office of Fair Trading, said: "The Competition Commission's market investigation into the bus industry showed how important competition between bus operators at a local level is.
"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.
"As such, we believe it is appropriate that the Competition Commission reviews this merger to ensure the interests of passengers are protected."
McGill's has expressed its disappointment at the inquiry, claiming it stepped in to protect community bus services and preserve jobs in the area.
Ralph Roberts, McGill's managing director said: "We are disappointed to hear of the OFT's decision.
"Despite offering a number of guarantees to the OFT in relation to fares, routes and frequencies and the introduction of a multi-operator ticket; we now face another six months of uncertainty.
"The decision throws into sharp relief the fact that we have a London-based government agency having a direct impact on local business, without the required local market knowledge."
He added: "McGill's has saved jobs and bus routes in Renfrewshire following Arriva's decision to withdraw.
"Had we not done so, we'd be witnessing a similar scene here as in Dalkeith and Musselburgh in recent weeks, with the loss of over 200 jobs."