This is just on the Montreal Gazette website.
Bixi will post an operating profit this year and Montreal taxpayers will not be on the hook for the service's $33-million debt, nor will they subsidize bike-sharing systems in other cities, the man in charge of Bixi said yesterday.
Roger Plamondon was reacting to news that the city's auditor general is investigating Bixi's finances, concerned that Bixi's debt will affect the city's bottom line.
A spokesperson for city auditor general Jacques Bergeron said he has requested information from the Public Bike System Co., the private company that runs Bixi, and will go over its books.
The PBSC is an offshoot of Stationnement de Montreal, the city parking authority, which in turn is an arm of the Board of Trade of Metropolitan Montreal.
Stationnement de Montreal lent the PBSC $33 million to launch Bixi.
Though Bixi bikes were road-tested by Montrealers after being designed here at the behest of city hall, Montreal has no written agreement with the PBSC spelling out details such as profit-sharing or the financing of international sales.
The PBSC has sold its system to several cities, most notably London, which last month launched a 6,600-bike system modelled on Bixi.
Since May, the city and the PBSC have been in talks to nail down Bixi's status and financing. Plamondon said several options are being
considered. "Is it leaving it as a not for profit? Is it something that should fall under more municipal control?"
Plamondon said the PBSC will post an operating profit in 2010, a year ahead of schedule. That's based on sales of 8,600 bikes to other cities and having 32,000 Montreal Bixi members by January. It currently has 28,000 but it expects to sell more over the next three months and via a Christmas promotion.
Plamondon said he's confident the auditor general will find the PBSC's business plan is "a very feasible one based on conservative hypothesis as to where we're going with Bixi internationally."
The plan says that "over the next five years we (will) generate enough cash flow to completely repay (our) debt," he added.
"The business plan makes it so that the system will not cost a penny to Montrealers. It's the expansion into other cities that permits us to fund" Montreal's Bixi.
But Bixi is causing cash flow problems at Stationnement de Montreal.
It remits money to the city annually, based on parking operations. For 2009, it owed $42.5 million, due by April 30, 2010, but because of its loan to the PBSC it could not pay that amount in full, said city spokesperson Bernard Larin.
A spokesperson for Stationnement de Montreal could not provide the amount outstanding or say when it will be repaid.
Larin said the outstanding amount will be paid at a later date, with interest.
"So no public money has been invested, because Stationnement de Montreal will reimburse the city," he said. "In the end, the city will make even more money because interest will be added to the amounts that are due by Stationnement Montreal."
As for the future of the PBSC, discussions are ongoing and "we will make a public announcement in the coming weeks," Larin said.
Stationnement de Montreal has been criticized in the past over its financial dealings with the city.
In 2000 and 2001, Montreal's auditor general chastised the company for shortchanging the city $3 million per year.
Read more:
http://www.montrealgazette.com/news/Bixi+says+debt+hurt+city/3448891/story.html#ixzz0xqBTuOsA
