Student Transportation (STA) wins new contracts



    Five-Year, $40 Million Contracts Increase Regional Density in New
    England; Two New School Districts to Provide 100% of Fuel

    TORONTO, June 2 /CNW/ - Student Transportation of America, Ltd. (STA),
(TSX: STB, STB.UN) announced it has been awarded new contracts to provide
school transportation services to students of the Danbury and Guilford school
districts in Connecticut plus a new five-year contract in Milton, Vermont,
that tucks into the company's existing facility. The two five-year Connecticut
contracts, commencing this July, will generate approximately $7 million in
additional revenue per year and over $36 million over the life of the
contract.
    All three contracts were awarded over the incumbent service provider
First Student. The Connecticut contracts include provisions for the school
districts to provide 100 percent of the fuel required while the Vermont
contract includes a fuel cap. Through these partnerships, the districts
maintain full control in negotiating fuel prices and, in turn, STA is able to
provide competitive bids that ensure the districts will receive the highest
levels of service.
    STA will add 165 vehicles to its fleet to serve the three new customers.
The company already serves a number of other school districts in both states.
    "We had a targeted program for growth this year that concentrated on
contracts where customers would partner with us in terms of fuel protection or
escalation clauses," said STA Chairman and CEO Denis J Gallagher. "These are
three good contracts that provide great fuel protection and add to our
regional density in New England where we have a great team and a reputation
for safe, reliable service,"
    In addition to the two Connecticut contracts, STA announced in March it
had been awarded a five-year contract totaling $8.4 million over the term by
the Kearsarge Regional School District in New Hampshire which also included a
provision for the school district to provide 100 percent of the fuel beginning
this July.
    "All these new contracts complement our existing business in New England,
have good margins and eliminate the uncertainty of fuel costs which has been a
strategic objective of ours," said the CEO.
    Gallagher also said approximately 97 percent of STA's existing contracts
up for renewal this year have been renewed so far and that the company
continues to make progress in renegotiating existing fuel protection
agreements as well as obtaining additional rate increases beyond the current
CPI to offset higher fuel costs in some contracts without such clauses.
    "We have a group of seasoned industry veterans who continue to apply
their experience and knowledge of the industry in both local and regional
markets which is a competitive advantage of STA. We continue to find new ways
to create value for our customers and our shareholders."
    The company said that the new energy investment portfolio, acquired as
part of the Canadex acquisition closed in January this year, has produced
increased cash flow due to higher commodity prices and has provided a "natural
hedge" against the portion of unprotected fuel costs in the company's core
transportation business.

    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 5,000 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.





For further information:

For further information: MEDIA CONTACT: Lynette Viviani, (973) 968-7929
office, (973) 534-1004 mobile, lviviani@rideSTA.com; INVESTOR CONTACTS:
Student Transportation of America Ltd., Denis J. Gallagher, Chairman and Chief
Executive Officer, (732) 280-4200, (732) 280-4213 (FAX); Patrick J. Walker,
Executive Vice President and Chief Financial Officer, (732) 280-4200, (732)
280-4213 (FAX); Keith P. Engelbert, Director of Investor Relations, (732)
280-4200, (732) 280-4213 (FAX), Email: kengelbert@rideSTA.com; Website:
www.rideSTA.com

Organization Profile

STUDENT TRANSPORTATION INC.

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STUDENT TRANSPORTATION OF AMERICA ULC

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