McGill’s Buses, owned by brothers Sandy and James Easdale, has launched a multi-million pound legal action claiming the latest government contracts were unlawful.
Transport Scotland awarded £45 million to five operators through the Scottish Zero Emission Bus Challenge Fund Phase 3 (ScotZEB3).
McGill’s applied for £4.3m to help buy 33 zero-emission electric buses from Scottish manufacturer Alexander Dennis, but its bid was rejected.
It has now submitted an appeal against the Scottish Government and Transport Scotland to the Competition Appeal Tribunal.
McGill’s argues that the government breached the UK Subsidy Control Act 2022, alleging that no separate subsidy control assessment was conducted for ScotZEB3, and that the funding is being used to subsidise new, competing routes rather than upgrading existing diesel fleets.
The company is challenging the scoring process and wants to overturn the decision taken in March, and force a comprehensive rethink of how zero-emission subsidies are allocated.
Sandy Easdale said: “The move would have boosted Scottish jobs and enabled it to remove more diesel vehicles from its fleet across Scotland.
“The largest share – £13 million – was awarded to coach firm Ember to buy 100 Chinese electric coaches to expand its existing network, which would not result in any diesel vehicles being replaced.
“We have questionable decisions being made on large amounts of public money by nameless people in secret rooms who are trying to avoid scrutiny.
“Decisions on taxpayers’ sums of this magnitude should be fully transparent and decision makers should be willing to be held accountable.”
McGill’s chairman Ralph Roberts said: “It now appears the fund is being used to support new competing services rather than replace existing diesel fleets, which raises serious questions about whether it is delivering on its stated aims.”
Co-owner James Easdale added: “There is also a fundamental question about fairness and transparency in how this funding has been allocated. We have looked very closely at the scoring process and reached the inevitable conclusion that a legal appeal had to be submitted.”
Last year, the Scottish Government was forced to step in to fund a furlough scheme for staff at Alexander Dennis after the firm announced it was considering consolidating its operations at a single site in Yorkshire, putting around 400 jobs at risk.
At the time, bosses said the firm would need an increase in orders if it was to become sustainable in the central belt.
Ember will be the biggest recipient from ScotZEB3, netting more than £13m for 100 buses and 43 charging points. Rock Road has been given £11.5m for 93 buses and 101 chargers.
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