is to become publicly-run next year.
It is currently operated by private company DB Regio for Nexus which manages it on behalf of the North East Combined Authority.
The contract ends in March 2017 and although Nexus has the right to extend it for a further two years, it today said it did not wish to exercise this option.
It is instead proposing to manage train operations and stations directly until 2019, allowing 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, are dissatisfied with the structure and the financial and operational performance of the current contract, as passenger outcomes 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 40 million passengers over the final year of the contract.
Nexus, as a public body, already sets fares and service specifications for Metro as well as maintaining most of the infrastructure on which trains run.
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.
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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 £400m in a new train fleet in the coming years.”
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While the Government has insisted on continued private sector involvement in the Metro, officials feel they have two years to prove what a publicly run system can do.
In a joint statement, the leaders of NECA, made up of the region’s seven local authorities, said: “For too long now Metro passengers have been let down by DB Regio.
“The operating contract with DB ends in March 2017 and Leaders on the Combined Authority are clear that it should not be extended. It has not been delivering for local people, and now is the time to move on and plan for the future.
“We will be demanding DB Regio does all it can to meet the expectations of passengers in Tyne and Wear in the run up to the contract termination date. After that, we have two years to look at how we improve the Metro as we plan with Government to win future investment.
“While ministers have made clear they will insist on continued private sector involvement in the Metro, we have a chance from 2017 to 2019 to show what can be achieved with a publicly-run railway.”
Nexus 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 inform discussions with the government and other fund-holders.
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Sharon Kelly, Managing Director of DB Regio Tyne and Wear, which operates Metro on behalf of Nexus, 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.
“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
Tyne and Wear Metro system to be publicly-run as DB Regio contract set to be scrapped next year
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.”