First Group unveils tram-bus venture

The bus and rail operator First Group is planning a revolutionary new approach to urban transport involving the use of vehicles that are half-tram and half-bus and operate along guided bus ways giving them priority over other traffic.

First intends to experiment with the new vehicles in the Yorkshire cities of Leeds and Sheffield early next year and, if successful, introduce the new system nationwide. The vehicles will be built in the UK and will be a fraction of the price of trams, which cost about £2m each, and light rail schemes, which have been experimented with in a number of large conurbations.

First is the UK's largest bus operator with a market share of 23 per cent and a fleet of 9,300 buses carrying some 2.8 million passengers a day. Moir Lockhead, the company's chief executive, declined to go into the details of the Yorkshire experiment but he said: "If it works, it will be a model we can use throughout the country."

He was speaking as First reported a small increase in underlying pre-tax profits last year to £161m, boosted by a strong performance from its North American school bus and public transit businesses.

Turnover in North America, where First is the second biggest operator of the familiar yellow school buses, rose 17 per cent to just over $1bn but the weakness of the US currency sliced about £4m from reported profits.

The company is pressing ahead with its attempts to introduce yellow school buses into the UK. It is due to take delivery of a further 26 this year and is bidding for a contract in Yorkshire that would require up to 200 buses.

Mr Lockhead said the group, which is bidding for another four UK rail franchises, could afford to borrow up to £250m if the right takeover opportunity came along.