Strike threatens £51m Serco deal

TRANSPORT and logistics group Serco is ensnared in an industrial dispute that could threaten the renewal of a five-year contract worth around A$125m (£51m) in the South Australian capital Adelaide.

Bus drivers employed by Serco, which operates more than 50% of Adelaide's metropolitan bus service, have vowed to continue industrial action, following on from a four-day strike earlier this month. The company says the drivers' claims will cost as much as A$20m.

Serco began limited bus services in Adelaide in 1997 and won a major five-year contract which started in April 2000. It has a right to renew that contract, estimated at around A$25m a year, for another five years subject to meeting performance standards.

The original contract was awarded by a pro-privatisation Liberal government, but the Labour Party - which vehemently opposed the privatisation - is currently in power in Adelaide.

Transport Minister Michael Wright has been tightlipped on the future of Serco's contract, but the dispute has produced a clamour for it to be reviewed. Serco's Asia Pacific operations turn over around A$350m each year.