London's Cycle Hire bikes get tax-payer bail-out

But before Tax Payers' Alliance bods foam at the mouth, the bail-out is taking place in Canada.
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Some of the costs of London's Cycle Hire scheme are subsidised by title sponsor Barclays but the bikes are all provided by Bixi of Montreal which also supplies bikes to city bike sharing schemes in Toronto, Ottawa, Minneapolis, Washington D.C. and Melbourne in Australia.

The Montreal scheme was launched in May 2009 by the Public Bike System Company, a private, not-for-profit developer.

The Bixi bikes in Montreal, Quebec, are almost identical to the Boris Bikes in London. The bikes are designed by industrial designer Michel Dallaire and built in the Saguenay, Quebec region by Cycles DeVinci. 

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Montreal's bike sharing scheme is run by the city's parking authority, Stationnement de Montréal. The scheme has 5000 bikes (London has 6000) and although it generates cash via rentals and via advertising deals, it does not earn enough money to pay its way. In effect, the Bixi scheme in Montreal is bankrupt and, like other forms of transport infrastructure, such as roads and parking spaces, will need to be propped up with public subsidy.

Later today Montreal politicians will be debating a $108-million bail-out package for the Public Bike System Company. To date the Bixi scheme has been bankrolled by Stationnement de Montréal.

The Bixi bail-out consists of a $37-million municipal loan as well as guarantees to cover a total of $71 million of credit lines Public Bike to allow it to service its contracts overseas, including London.

Montreal tax-payers have been filling newspaper letters pages with vitriolic comments about the "wasteful public subsidy" spent on the city's public bikes, with each one estimated to cost $7,400 when all the costs are taken into account, such as parts, labour, parking stations, storage garages, and Bixi-toting trucks. The costs of public subsidy for drivers, including road building and 'free' parking spaces, are ignored.

Quebec's Department of Municipal Affairs is expected to approve and underwrite the financing package.

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