Row over city bike hire funding

UNDER FIRE: Mayor Len Brown tries out the bike hire scheme during the Rugby World Cup.
UNDER FIRE: Mayor Len Brown tries out the bike hire scheme during the Rugby World Cup.

A Devonport bicycle hire company has accused Auckland Transport of illegally providing public money to fund a private business venture - a claim the agency vehemently denies.

David Peters, director of Cycle Auckland, said business at other daily bicycle hire companies was down nearly 40 per cent after a Rugby World Cup tender was awarded to Adventure Capital. 

The company, which started in 2006, already had an existing tourism bike scheme.

"Our contention is the city shouldn't be involved in private business in this manner and not undercut everybody - that's anti-competitive," Peters said.

Peters claimed that in 2011 Auckland Transport put a tender out for the two-month public bike hire scheme during the rugby tournament but, he claims, they then changed it to an ongoing tourism venture after the tender was awarded.

"Most of the operators weren't interested in this, a couple were ... Somewhere after it they changed the specifications of the tender to a tourism venture, which has manifested itself in competition for the market," he said. 

He claimed Auckland Transport has acted outside its legal parameters under the Public Transport Management Act 2008.

Peters said the Britomart-based Adventure Capital charged $20 for a daily hire compared to the going rates of between $28 and $35.

Auckland Transport has denied acting outside the bounds of the law, saying that Peters' company declined to submit a tender.

"The tender was to provide and operate a bike hire scheme at two locations for the Rugby World Cup," Auckland Transport spokesman Mark Hannan said.

Hannan said in December 2010 the council Transport Committee asked Auckland Transport to look at a public bike hire scheme. 

Auckland Transport did that and issued a Request for Expressions of Interest.

He said the specific public bike hire scheme initially proposed was not viable but a similar scheme for the Rugby Wold Cup was beneficial. It then developed an alternative bike hire scheme to operate for two months during the Rugby World Cup.

All daily bicycle hire companies initially approached were invited to submit proposals for the Rugby World Cup scheme.

Only two proposals were put forward.

"Auckland Transport has received legal advice which has confirmed that it followed a competitive process when it selected an operator for the scheme,"  Hannan said.

The scheme and the arrangement between Auckland Transport and Adventure Capital came to an end after the Rugby World Cup and the agency is no longer involved with the company.

Peters said he would continue to hold Auckland Transport to task, but dragging the matter through the courts would cost upward of $50,000.

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