One of the West Midlands' biggest bus operators is threatening to remove free travel for pensioners because of a legal dispute over how the concessionary scheme works.
Last week, People Express, formerly known as Pete's Travel, told Centro in a three-line email it will withdraw from the region-wide concessionary fare scheme next month because it is unhappy with the amount of money it is being reimbursed.
At yesterday's meeting of the West Midlands Passenger Transport Authority, which sets Centro policy, councillors agreed to issue a compulsory notice legally compelling People Express to allow free travel to pass holders.
Last night, the bus company's management company Probus said it was considering a legal challenge to the notice.
It said the root of the problem lay in a discrepancy between the number of passengers Centro claimed it carries compared with its own figures.
The company claims it was underpaid by £70,000 last month and expected to be short of a similar sum at the end of the current four-week period.
Managing director Kevin Jones said: "We cannot sustain these kind of losses in the long-term, we cannot go on suffering them."
At yesterday's PTA meeting, Centro officer Chris Perry told councillors Probus had sent an email notifying Centro of its intention to withdraw from the scheme on July 20.
PTA member and Birmingham-City Council transportation-cabinet member Coun Len Gregory (Con Billesley) said: "I find it bizarre this email has been sent and no one has gone back to ask the company why."
Coun John Lines (Con Bartley Green) added: "I would assume it is a grown up firm and would consider their contract to be serious. Have I missed something here?"
Centro director general Rob Donald admitted he was surprised the dispute was a matter Centro did not have delegated powers to resolve without the PTA's guidance.
He offered councillors a private briefing on details Centro could not discuss in a public meeting.
People Express run about four per cent of bus services in the West Midlands conurbation.
Although that is dwarfed by the nearly 90 per cent of buses run by Travel West Midlands, the company is still the second largest operator in the region.
Companies are reimbursed for the concessionary fare scheme through a voluntary system called Sceptre.
Mr Jones added: "I signed up to a reimbursement system but I do not believe Centro is implementing what we agreed on. At the moment, Centro officers survey passengers on just under one per cent of my buses and then multiply the result by 100.
"But I have electronic ticket machines that count the number of OAPs too and I believe there is a difference.
"The problem is there is a slight discrepancy, but when you multiply that by 100 it becomes a significant discrepancy."
He continued: "Operators don't mind concessionary travel.
"The whole of the West Midlands can travel for free, just as long as we are paid for all those passengers."
A Centro spokesman said it had investigated the Sceptre system in the light of Probus' complaints but concluded it "provided accurate reimbursement in accordance with the agreed scheme".
A report prepared by Centro officials for yesterday's PTA meeting also raised possible threats to the scheme.
It said: "There could be a negative effect on the public perception of the concessionary scheme if concessionary travel is denied on certain buses."