Student Transportation (STA) Reports Increased Activity in Privatized Busing



    MUNICIPAL BUDGETS FORCE QUESTION; WHAT BUSINESS ARE SCHOOL DISTRICTS IN?

    WALL, NJ, Jan. 12 /CNW/ - Student Transportation of America Ltd. (STA),
one of North America's fastest growing school transportation providers, today
reported that it is has seen an increase in the number of school districts
interested in "converting" from public to private school bus fleets. The North
America school transportation market is a $15 billion industry and
approximately two-thirds of school districts currently own and operate their
own fleets.
    "Budget constraints are forcing local municipalities, school districts
and state officials to decide between cutting programs, laying off teachers or
purchasing new school vehicles and funding in- house transportation
departments," said Denis J Gallagher, STA Chairman and CEO. "We're pleased to
see the more these government operations learn about contracted transportation
services, and the true cost of their own operations, in time and money, the
more they see the economic and operating advantages that we can bring to their
already depleted municipal budgets. We have proven we can implement
improvements and efficiencies in operations and provide the necessary capital
for fleet purchases that are important issues facing today's financially
strapped municipalities and school districts."
    "These difficult economic times represent significant growth
opportunities for our business. In the current recessionary environment, we
are experiencing an increase in the availability of labor, fuel prices are
down substantially, and interest rates in our debt facility are at very low
rates to use for our growth plan. We have grown at a rate of over 20 percent
in each of the last eight years and have recently submitted several new bid
and conversion proposals for local school administrators to consider,"
Gallagher said.
    Recently school districts in over twelve US states reportedly are going
down the privatization road or investigating the conversion of their school
transportation systems. Gallagher said STA has completed several successful
conversions in recent years that have the full support of the existing
drivers, mechanics, and administration and have built an excellent
relationship with the community.
    "This is no time to cut teacher salaries and educational or
extra-curricular programs. Instead, taxpayers should challenge state and local
governments to concentrate on what business they are in; hopefully that's
education. When we provide the capital, operate their system more efficiently,
and employ their existing drivers while saving taxpayers money, I guess that
answers why there is an increase in activity," Gallagher said.

    About Student Transportation

    Founded in 1997, Student Transportation is the fourth-largest provider of
school bus transportation services in North America, conducting operations
through local operating subsidiaries. Student Transportation has become a
leading school bus transportation company by aggregating operations through
the consolidation of existing providers and conversion of in-house operations
and currently operates more than 5,600 school vehicles in North America. For
more information, please visit www.rideSTA.com

    Forward-Looking Statements

    This news release contains "forward-looking statements" within the
meaning of applicable securities laws, which reflects the expectations of
management regarding STA's results of operations, expense levels, cost of
capital, financial leverage, seasonality, cash flows, performance, liquidity,
borrowing availability, financial ratios, ability to execute the STA's growth
strategy and cash distributions. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "track", "targeted", "estimate", "anticipate", "believe",
"should", "plans" or "continue" or similar expressions suggesting future
outcomes or events. These forward looking statements reflect STA's current
expectations regarding anticipated future events, results, circumstances,
performance or expectations, which are not historical facts. Forward looking
statements involve significant risks and uncertainties, and should not be read
as guarantees of future performance or results, and will not necessarily be
accurate indications of whether or not or the times at which or by the
performance or results will be achieved. A number of factors could cause our
actual results to differ materially from the results discussed, expressed, or
implied in any forward-looking statement made by us or on our behalf,
including, but not limited to the factors discussed under "Risk Factors" in
our Annual Information Form. These forward looking statements are made as of
the date of this news release and, except as required by applicable law, we
undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

    %SEDAR: 00021418E




For further information:

For further information: INVESTOR CONTACTS: Student Transportation of
America Ltd., Denis J. Gallagher, Chairman and Chief Executive Officer;
Patrick J. Walker, Executive Vice President and Chief Financial Officer; Keith
P. Engelbert, Director of Investor Relations, (732) 280-4200, Email:
kengelbert@rideSTA.com, Website: www.rideSTA.com; MEDIA CONTACT: Lynette
Viviani, (973) 968-7929 office, (973) 534-1004 mobile, lviviani@rideSTA.com

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STUDENT TRANSPORTATION INC.

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STUDENT TRANSPORTATION OF AMERICA ULC

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