Jersey Bus and Connex had services on the same routes

The inquiry has been ordered in response to public and political concerns over the tendering process.

It will look at claims that public money is being spent on Connex bus services failing to attract sufficient passengers after winning the contract from Jersey Bus.

The investigation is being carried out by the States' Chief Auditor, Liz Burst.

Tendering decisions

Connex was awarded the contract to run Jersey's buses at the end of September 2002.

Shortly after this, Jersey Bus started up its own Easylink service, which ran on busy routes in the summer, often at lower prices than Connex.

The inquiry also follows claims by the Environment and Public Services Committee's president, Deputy Maurice Dubras, that Jersey Bus had not told anyone of a 20% pay rise it agreed with workers around the time it lost the contract to Connex.

The pay rise meant an extra bill to taxpayers of about �500,000 because the company was still under contract to the States even though the work was about to be moved to Connex.

The payment of this money came to light after Deputy Dubras reviewed Connex's first year in operation in the States at the end of 2003 and gave details of all subsidies paid.

Jersey Bus boss Chris Lewis has angrily denied that no-one in the States knew about the pay deal, saying that all tendering companies, the committee and its department had been told of it before any decisions on the tenders were made.