A fast and cheap bus system called the “Circulator” will bring money and mobility to congested Washington, D.C., supporters say. Detractors say the government is working to put them out of business.

At issue is a proposed fleet of 86 buses that would run in four loops — up and down Seventh and Ninth streets Northeast to Anacostia, from Union Station to Georgetown, around the Mall, and between the White House and Capitol Hill.

D.C. area planners say they hope to get two routes, the Seventh and Ninth street route and the bus to Georgetown, running by next summer.

“Each bus can carry 50-plus people, that’s 50-plus potentially less cars, it’s 50 more movements that are spatially effective,” said Dan Tangherlini, D.C. transportation director. Buses would run every five minutes and cost 50 cents to ride.

Planners say existing public transportation doesn’t allow for easy movement inside the city — the Metrorail and the existing Metrobus system are designed to take commuters in and out of D.C. but not around and in it, they say.

Traveling from one federal agency to another or taking a lunchtime trip to Georgetown from Capitol Hill are major undertakings, Tangherlini said, creating a “huge pent-up demand and need for this service.”

Implementing the entire system would require a onetime subsidy of around $26 million for capital costs and an annual operating subsidy of $9 million. Organizers hope to cover costs by having the federal government, the District of Columbia and area businesses each offer one-third of the necessary money. Participating planning organizations include the District, the National Capital Planning Commission, the Washington Metropolitan Area Transit Authority and the Downtown D.C. Business Improvement District.

Len Foxwell, transportation director for the Downtown BID, said that when fully up and running, the Circulator would recover 51 percent of annual operating costs.

It’s the government funding that small bus and van operators say is unfair. “We don’t get any subsidy, we don’t need a subsidy from the government to provide our services,” said Jose Figueroa, owner of van company Priority Services, which transports federal workers in vans.

Peter Pantuso, head of the American Bus Association, called the proposal “a complete waste of taxpayers’ dollars” and the project a “boondoggle.”

He added, “It’s absolutely unfair government competition. It’s like bringing a commissary in and putting it next to a Safeway.”

Figueroa said the Circulator would damage his business and possibly put other van transportation companies out of business. Private companies already do a good job providing transportation around Capitol Hill, he said. “We’re giving the government the best value, because we won whatever work we have on a competitive basis,” he added.

Foxwell disagreed.

The current combination of private vehicles and public transportation is “not sufficient to do the job,” he said. Congestion is choking the city, and travel around the District is difficult, he said.

Tangherlini said new thinking needs to be applied to transportation planning. Ways to increase passenger density rather than expand streets are required, he said, “because we’re not going to get additional capacity in our roads.”

Still, Circulator boosters say that the majority of their projected 16 million annual riders would probably not be District residents, but tourists.

Organizers say again that existing tourist transportation doesn’t meet needs.

The National Park Service isn’t so sure, however. It warned Circulator organizers that it awarded Tourmobile Inc., a locally owned company, the exclusive right to ferry tourists around the Mall. If the Mall Circulator was to go forward before the concession expires, “We would be in breach on the contract,” said Steve LaBelle, Park Service concessionaires program manager.

Tourmobile owner Tom Mack said he will “probably” not re-bid for the Park Service concession when his current, 17-year contract expires Dec. 31, 2005. Mack cited “personal reasons” for his probable retirement, but added that when the government subsidizes a nonprofit organization “that is in competition with private industry, [that] is unfair competition.”

Foxwell said the current arrangement for tourists is costing the city at least $400 million a year in unspent dollars, $285 million of which could be recovered by the Circulator.

Tourists “don’t have an easy and convenient way to get into the downtown area” from the Mall, he said. They drive back out of the District “to Virginia or Maryland or wherever they came from, and we don’t capture a dime of their disposable income.”

Besides, the Circulator and Tourmobile offer different services, according to Foxwell. “We’re comparing apples and oranges. [Tourmobile] is a premium interpretative service as opposed to a standard transit service,” he said.

Private industry advocates who argue the government is stealing business through unfair subsidy might as well argue the Metro should be shut down, Foxwell said. “You could make the same argument by saying Metro hurts the taxicab industry.”

Foxwell said his organization plans to begin a lobbying campaign on Capitol Hill to secure federal funding for at least the first two Circulator routes.

“They’ll know we’re coming,” he said. “Their phones will start ringing very shortly.”