It makes sense to merge the Helsinki bus companies

EDITORIAL

print this

The dispute over the merging of Helsinki City Transport’s Bus Transport unit (HKL) and Suomen Turistiauto (STA) to form a limited company has erupted into a wildcat strike that began in the early hours of Monday morning.
      The chief shop steward representing Helsinki City Transport (HKL) drivers has fired up his troops to what has been described as a “day of action” by persuading them that the City of Helsinki intends at some future juncture to sell off the company so formed to the private sector.
      The municipally-owned enterprise model appeals to the union side, but the City’s financial managers and National Coalition and Green members of the City Council are advocating the formation of a separate company.
     
Helsinki’s bus traffic has for some years been in a state of not inconsiderable confusion. The city’s routes have three private bus companies operating on them (Connex, Concordia, and Pohjolan Kaupunkiliikenne), a company wholly-owned by the City itself (Suomen Turistiauto), and the municipal enterprise HKL’s own profit-centre Helsinki Bus Transport.
      Owing to the fact that routes have been put out to competition, all the players are under the gun financially.
      The craziest aspect of it all is that the city’s "own" operators, HKL and STA, are in direct competition with one another. On top of this, HKL Bus Transport and STA have a large shared depot in Ruskeasuo, where both operations carry out service and repair work on their vehicles on different sides of the same retaining wall.
      It is as plain as day that cost efficiency is a non-starter under such circumstances.
     
The present arrangement is untenable  for many reasons. The most significant flaw is that HKL plans Helsinki’s internal public transport system and also puts it out to tender.
      This is a muddying of the roles of service provider and customer. It is unfair on the private bus companies. They are not on the same starting-line with the municipal authority, HKL Bus Transport.
      From the perspective of the capital’s citizens, it makes no difference whether the city’s bus company is a municipal department or a public limited company. The main thing is that services should be reliable, the fleet of vehicles is adequate to the purpose, and fares are reasonable. Forming a company would appear to offer the best guarantee that these basic aims are met.
     
What is important is that public transport services are arranged in a financially sound and sensible manner. Now both units - HKL and STA - are generating a loss.
      It would be easier to put the new company into the black. The simple act of changing the form of consolidation would provide a sizeable fillip. The estimated benefits accruing from merging the two outfits is around EUR 1.5 to 2 million annually.
      The City of Helsinki has promised to safeguard the position of personnel. On the other hand, there has been talk of a need to axe 18-28 jobs. But this will not affect drivers; the axe will fall mainly on administrative staff.
     
From the viewpoint of the employees, the key issue is that Helsinki wants to remain involved in the city’s bus transport. The employees would also do well to remember that neither the management of the planned new company nor its shareholders will be in a position to sell it off to the highest bidder, but that any moves in this direction would require the blessing of the City Council.
      Hopefully one can trust the City’s assurances that it intends to hang on to its bus company. It is hard to predict the future, but equally hard to envisage that the councillors would actually agree to give up their own bus service provider.
      Nothing hitherto suggests that behind the front of forming a separate company lies a hidden agenda of disposing of HKL or some part of it.
      The use of the sell-off and privatisation bugbear is irresponsible, and it may not be totally unconnected with the approaching municipal elections.
     
The cruel truth is that the present transport units are in such dire shape that something has to be done with them.
      It also should be noted that the bus services operate in a market of free competition, in which one company under city ownership is going to be stronger than the two we have at present.
      Running down Suomen Turistiauto to become a part of the municiapl authority that is HKL would be a long and expensive process, and one that does not make any sense.
      The idea of "Helsinki Bus Company Limited" is not the sort of ogre that the union leaders are painting it to be.
     
     
Helsingin Sanomat / First published in print 13.9.2004


Previously in HS International Edition:
  Strike by HKL drivers causes less traffic chaos than expected (13.9.2004)
  Helsinki City Transport drivers to strike on Monday - traffic chaos likely (10.9.2004)
  Helsinki survives public transport strike - drivers return to work Tuesday morning (14.9.2004)

Helsingin Sanomat