The transit system can save about $89,000 a year in operating costs by purchasing 28 shorter-than-normal diesel buses for use on suburban feeder routes, transit director Rick Borland said yesterday.

Borland told civic works committee that Orion buses, which are 10 feet shrter than the traditional 40-foot vehicle, fill a need which is not served by Flyer Industries Ltd. and General Motors.

"On some routes, we're dispatching larger buses than is necessary in order to accommodate the load," he said, adding the Orion vehicles would be used on 12 suburban routes.

Works commitee yesterday iistructed Borland to prepare specifications for possible purchase of the 28 vehicles. A final decision on whether to proceed won't be made until council reviews the city's 1981 operating budget.

The manufacturer of the Orion, Ontario Bus Industries Ltd. of Toronto, is the only Canadian company offering a 30-foot bus, Borland said, adding that Winnipeg-based Flyer has shown no interest in entering this market.

The transit system proposes to buy 22 of the 30-foot models and six 35-foot vehicles and either sell or scrap 18 older buses now in its fleet.

If the new vehicles are bought from Ontario Bus Industries, the cost would be $2,912,000

The 30-foot Orion costs about $3,600 a year less to operate and maintain than the 35-foot Flyer and GM buses now being used on minor routes, he said, and the 35-foot Orion is $1,700 cheaper to run. At $102,500 each for the 30-foot model, the Orion is also less costly to buy than Flyer models, which cost $120,000, he said.

He said the proposed purchase doesn't conflict with a proposal to electrify transit, because the vehicles would be used on low-volume routes where electrification isn't justified.

However, Borland said he hasn't made a cost comparison between Orion and Flyer based on the assumption of a 50-per-cent provincial subsidy for the latter vehicle. Until 1978, a subsidy was available to Winnipeg for purchases of buses made by the provincial government-owned Flyer.

Borland said the city proposed to buy 30 buses last year, but this fell through when the province turned down a request to share the cost.

"The province has told us to buy our buses where we can get the best deal," works committee chairman John Angus said. "Whether or not they're going to assist us remains a question."

In any event, Flyer isn't able to deliver buses until late 1982 because of a backlog of orders, whereas Orions could be acquired within six months of the order date, Borland said.

If the purchase is approved, transit would sell six 19-year old GMC units and scrap six 12-year-old Flyer buses, all of which require major repairs. Six small gasoline-engine buses bought about five years ago would be sold.