A SECRET deal to carve up bus routes in Northumberland and Tyneside has been exposed by competition authorities.
The agreement between Arriva and Go North East prevented passengers getting more frequent services and lower prices, the Competition Commission said.
Documents released to the Commission have revealed a four-year bus war between the companies which saw officers threatening to start up new routes if the other firm encroached on their territory.
But despite these battles senior staff at the two firms later colluded to not compete with 70 emails, phone calls and meetings between them – far too high for what would normally be expected of competing firms, the Competition Commission said.
The managing director of Go North East and the commercial director of Arriva North East, whose actions were both detailed in the Commission findings, have stepped down from their posts. The two firms say this is not related to the investigation, with Arriva’s officer taking early retirement.
For years both firms were locked in sporadic bouts of aggression while at the same they were discussing with each other who should have which territory.
As aggression continued to bubble away, the two sides eventually agreed to swap depots, allowing Go North East to be handed Hexham to Newcastle routes while Arriva took control of routes from Ashington into Newcastle.
This substantially reduced competition on both corridors into Newcastle and the motives of the deal are questioned by the Competition Commission.
In the run-up to the 2010 depot swap, and as part of the long-running disagreement, Arriva threatened to launch a new bus route to compete in part with the Gateshead to Newcastle 53/54 route.
As a result of this, Go North East put together a strategy it called Sword, Spear and Shield to fight Arriva and launch three buses for every one its rival had to make them back off.
When Arriva dropped its new bus plans, Go North East decided to withdraw its challenges to Arriva, but delayed this in order “to avoid stimulating Office of Fair Trading interest”.
Last night Bernard Garner, director- general at transport group Nexus, said: “If these bus company managers had spent more time on the quality of service they offered passengers, and less time bouncing between turf wars and secret deals, then the region might have a better bus service.
“The existing bus market has failed the passenger here. I believe the time is now right to consider new ways to give local people the bus service they deserve and the local economy needs.
“We will be studying the Competition Commission’s provisional findings in detail. We will respond with our own views on what local remedies are needed.”
In its latest findings, the commission has said it was concerned at inconsistencies from evidence provided at different stages in the investigation. A set of papers put together for senior Go North East staff and law firm Dickinson Dees eventually revealed extra information which saw the commission reopen its investigation.
With a final report out in January, the commission says it has provisionally concluded that competition was restricted by the two firms.
