The bus inquiry will cost about �100,000

Connex took over from JerseyBus in 2002 after the States committee in charge decided to allow other companies to bid for the contract.

But a JerseyBus staff pay rise meant an extra �500,000 cost to taxpayers as Jerseybus was still under contract even though the work was about to be moved.

It is among a number of issues being discussed in a two-day States sitting.

Legal issues

Connex was awarded the contract to run Jersey's buses in September 2002.

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

Environment and Public Services Committee president Deputy Maurice Dubras said that JerseyBus had not told anyone of a 20% pay rise it agreed with workers around the time it lost the contract 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.

JerseyBus boss Chris Lewis 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.

The Policy and Resources Committee said the bus inquiry will delve into legal and accounting issues, and both will be expensive to investigate.

It is estimated it will cost about �100,000 in total.

In addition to lawyers fees, the chairman of the three-man panel, who is yet to be determined, is likely to receive about �700.