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Iqaluit bus stops running Jan. 10

City will negotiate compensation with contractor

JIM BELL

Iqaluit's "public transit" scheme consisted of one rented bus and driver. Though backers had high hopes for the service, riders stayed away in droves. (FILE PHOTO)

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The City of Iqaluit's public bus service will go off the road Jan. 10, following a city council decision to drop the service made during recent budget discussions.

That means the only task now facing city staff is to work out a compensation deal with the contractor, R.L. Hanson Construction Ltd. The city and the Hanson firm are only about half-way through the second year of a five-year contract that started in July, 2003.

No can say exactly how much compensation the city will end up paying.

"We have no idea how this is going to play out," said Ian Fremantle, the city of Iqaluit's CAO.

Under the terms of their contract with the Hanson firm, the city has already given the contractor 30 days notice of its intention to back out of the agreement.

The city spent about $155,000 on its bus service last year, with most of that money going to the contractor. In exchange, the Hanson firm supplied a bus and driver, and kept any money raised by selling fares.

But at $2 a ride, fare revenue wouldn't have brought in much cash.

A recent study done by Dillon Consulting shows that ridership has dropped from a high of about 300 riders a week to only 200 - about 28 riders a day.

The city estimates this cost them a whopping $16.99 per user.

"You could supply every rider with a taxi voucher and still be $100,000 to the good at the end of the year," Fremantle said.

The city has designed its 2005 operating budget to produce a cash surplus of about $665,000, which will be automatically diverted to cover projected deficits in its five-year capital plan.

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