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September 2011 | Angeline Albert
supplier numbers, renegotiating contracts and centralising the procurement of
buses has contributed to £16 million cost savings at the Go-Ahead Group.
bus and train operator said cutting 1,200 suppliers supported savings that
helped company increase profits by 14 per cent to £115.1 million.
has also centralised the procurement of buses, which was previously handled by
individual companies it controls such as the Oxford Bus Company and Metrobus, to maximise
spend. In total the group operates around 3,800 buses in the UK.
the rail part of the group, the company has renegotiated contracts with
suppliers, for goods such as staff uniforms and the price charged to the
company by Network Rail to access rail tracks. Around £13 million from improved
contract management in this part of business of the £16 million savings are
one-off savings that will not be repeated in the future. Go-Ahead runs three
train franchises - Southern, Southeastern and London Midland – through a joint
its financial report for the year,
Go-Ahead said: “We have maintained a strong discipline in cost control and this
remains a priority with initiatives focusing on both procurement and scheduling
efficiency. The operating profit from our rail division was in line with our
expectations and significantly ahead of last year, benefiting from a continuous
shift away from car usage, innovative marketing, rigorous cost control and
procurement and contract management benefits.”
rail, the group said it “will continue to drive revenue and control costs to
help offset the challenges of reduced subsidies/increased premiums in its