Transport bosses move to take back control of Metro after controversial contract with German firm

Metro bosses have confirmed it plans to bring the running of the system back in house rather than renew its contract with its operating firm.

Monday, 14th March 2016, 11:00 am
Updated Monday, 14th March 2016, 11:31 am
Tyne and Wear Metro operations could be brought back in house under plans by Nexus.

The RMT union has called it a “massive victory in the battle for public ownership.”

Nexus hopes to win the backing for the plans from the North East Combined Authority when it meets next week.

Nexus Managing Director Tobyn Hughes

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Although it has the contractual right to extend the current contract for a further two years, today it has said it did not wish to exercise this option.

Instead, it is proposing to manage train operations and stations directly until 2019, which it says will allow it to prepare for significant changes that will come with investment in a new train fleet.

Both Nexus and the operator, DB Regio Tyne and Wear Ltd, say they are dissatisfied with the structure and the financial and operational performance of the current contract, as the day-to-day service passenger experiences are not where either party would want them to be.

Nexus has agreed an investment package with DB Regio to deliver improvements in fleet performance and customer service for Metro’s 40million passengers over the final year of the contract.

Nexus Managing Director Tobyn Hughes

Under the proposals, it would manage Metro stations and train operations directly from 2017 until 2019, when a new and different contract would begin incorporating delivery of a new train fleet during the first half of the next decade.

Tobyn Hughes, managing director of Nexus, said: “The future of the Tyne and Wear Metro holds a major investment in a new fleet of trains, and we need to prepare the business for that.

“The current contract that expires in March 2017 is not delivering the outcomes for passengers that either we or the operator wants to see.

“As a result we propose not to exercise our option to extend it beyond its natural expiry date.

“An investment package has been agreed to improve performance over the final year of the contract.”

“Managing Metro directly for a limited period will allow Nexus to prepare the Metro business for the significant change that will come with further investment of more than £400million in a new train fleet in the coming years.”

Metro passenger numbers have grown 14% over the past two years to 40.4 million, and Nexus says it remains one of the most high-frequency and lowest cost urban rail operations in the UK for both passengers and taxpayers.

It is working on a business case for a new train fleet to be introduced in the early 2020s, along with a draft specification for rolling stock.

This is expected to be completed in the summer, and will set out the benefits of investment to fund-holders and other stakeholders.

It will present options for future operating models and fleet to the leadership board of the North East Combined Authority during the summer, and this will support discussions with the government and other fund-holders.

The RMT’s general secretary Mick Cash said: “Today’s announcement on the Tyne and Wear Metro is a massive boost in the battle for public ownership and comes after years of hard work and pressure from RMT members and officials across the North East.

“This is their victory.

“RMT will now press for the initial two year transition to be turned into a permanent arrangement for this essential public service.

“Today’s announcement proves that the combination of a strong union and a relentless public campaign is unstoppable.”

Sharon Kelly, managing director of DB Regio Tyne and Wear, said: “As scheduled, our contract with Nexus was always due to end on 31 March, 2017, and we will remain fully committed to the contract until this date.

“It’s been a privilege to be part of the delivery of Metro services for the past six years and during this time a great deal has been achieved to better the service provided to our customers.

“We have played a significant role in the successful delivery of the Metro fleet refurbishment, we’ve invested in improving station environments and we’re proud to be able to say that all Metro stations have been accredited as Safer Tram Stops.

“We invested in technology to reduce fraudulent travel which resulted in DB Regio Tyne and Wear delivering the lowest fraud rate in the history of Metro.

“Last year saw passenger numbers on Metro topping 40 million, firmly establishing Metro as the fastest growing light rail operator outside London.

“Metro customers have been, and will continue to be, our number one priority.

“We have introduced new methods of communication to better engage and share information with customers during our contract and this will continue to be our focus going forward.

“I can assure customers that our priority will be delivering the best possible service to Metro users throughout the year ahead.”