Owner of Hong Kong’s Citybus, New World First Bus in talks with government about options for cutting losses
- ‘When we bought this business in the middle of a crisis, we were not naive to the challenges, but it was worse than expected,’ says CEO of Bravo Transport Services
- Options on the table include subsidies, a merger and granting the company the rights to develop property above and around its depots
The new owner of Citybus and New World First Bus is in talks with the Hong Kong government about potentially securing the rights to develop the land above and around its depots, a model long used by the MTR Corporation to generate income to fund its rail projects.
In an interview with the Post, Adam Leishman, CEO of Bravo Transport Services, said the ongoing discussions were aimed at making the two loss-generating firms sustainable, with other options including government subsidies and a review of the bus fare adjustment mechanism, and even a possible merger.
“When we bought this business in the middle of a crisis, we were not naive to the challenges, but it was worse than expected,” Leishman said. “[The Covid-19 pandemic] has led to a landslide drop of ridership, and significant and ongoing financial losses. Our current situation is financially unsustainable.”
One possible option, he said, would be to allow franchised bus operators to mimic the MTR’s “rail plus property” model, under which the government provides the corporation property development rights at its stations and depots to help bolster its bottom line.
“As we move to zero-emission buses, everything changes. First, we need a significant investment. Where does that money come from?” Leishman said. “One of the possible solutions is to do something similar to how the MTR works, to generate revenue from alternate sources [that] can be invested into the system.”
Pivoting to a similar model of building communities around transport hubs was one route towards making the bus industry sustainable, he added.
“I argue very strongly that buses can equally do that, and where there is no rail, buses should be able to fill that void,” he said. “We should create other hubs around bus interchanges, around bus depots, and bus stations, and we could do a similar kind of thing.”
Citybus and New World First were suffering huge losses of around HK$25 million (US$3.2 million) a month amid the pandemic, and Bravo shareholders injected an additional HK$337 million this year to keep services running, Leishman said
