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Metrolink Phase One
Phase One saw a change in the way Light Rail schemes are designed and built in the United Kingdom. Previously schemes, such as the Tyne and Wear Metro, were designed in detail by the public sector body and its consultants. The scheme was then be put out to tender and the selected private sector firms would build their parts of the scheme. Operation and maintenance of the completed system was then undertaken by the public sector body.
In July 1987 the Government announced that GMPTE’s Metrolink proposals must involve private sector capital, in addition to meeting other conditions for a Department of Transport (DoT) grant under Section 56 of the 1968 Transport Act.
The Government required private sector capital to be invested with a real transfer of risk. There could be no possibility of the public sector underwriting this risk.
GMPTE was limited in the level of design detail which it could specify, especially when compared with earlier schemes. The number of vehicles was also limited to 26, GMPTE had wanted about 10 more.
Considerable negotiations between the Government and GMPTE resulted in a DBOM contract — which covered designing and building the system, then operating and maintaining it for a 15 year period.
| Phase 1 Funding | ||
|---|---|---|
| Source | GBP | |
| Borrowings by GMPTA | 69 | |
| DoT Section 56 grant | 48 | |
| Borrowing from European Investment Bank | 15 | |
| European Regional Development Fund | 13 | |
Phase 1 Funding table gives a breakdown of the net cost of GBP 145 million. Figures are rounded to the nearest million pounds.
The private sector capital contribution was an operator concession fee of GBP 5 million which went towards construction costs. Bidders were taking the risk that they could make enough money from operating the system to pay their costs.
There were also GBP 4 million of contributions from other bodies.
The Government agreed to make additional revenue support payments to the Local Authorities, over a number of years, to meet Borrowing Costs.
GMPTE, on behalf of local taxpayers, owns the whole Metrolink system.
Metrolink Phase Two
| Phase 2 Funding | ||
|---|---|---|
| Source | GBP | |
| Altram | 95 | |
| GMPTA Cash Reserves | 26 | |
| Borrowings by GMPTA | 17 | |
| Developers | 12 | |
| European Regional Development Fund | 10 | |
Phase Two was also a Design Build Operate and Maintain contract.
Phase 2 Funding table gives a breakdown of the net cost of GBP 160 million. Figures are rounded to the nearest million pounds.
The Altram figure includes the compensation paid to GMML for the early termination of the phase 1 concession contract.
GMPTA Cash Reserves were from the sale, in two parts, of Greater Manchester Bus Company.
The Government again agreed to make additional revenue support payments to the Local Authorities, over a number of years, to meet Borrowing Costs.
Metrolink Phase Three — End of Line for Design Build Operate and Maintain
Over the years since Phase One was completed, private sector companies and their bankers have had some less than satisfactory experiences of Light Rail and Main Line Railway contracts.
The price quoted for Metrolink Phase Three in March 2000 was GBP489m, with a Government contribution of GBP289m and GBP200m from the private sector. In December 2002 the price had risen to GBP820m, with a Government contribution of GBP520m and GBP300m from the private sector. Also there was the possibility of further cost increases.
Withdrawal of funding — see 26 July 2004: Fury at Metrolink Funding Decision News — raised a storm of protest in Greater Manchester. The Back On Track Campaign page has further details.
On 16 December 2004 Transport Secretary Alistair Darling announced that Metrolink extensions are back on track — but not at any price. He told MPs that the original GBP520m budget for the three extensions was still on the table. It has been agreed that proposals for the maintenance and renewal of the existing Metrolink system could be a first call on these funds.
Phase 1 and 2 Upgrades
Proposals were sent to the DfT on 27 January 2005. These are for essential improvements and/or renewals which would have happened in the early stages of a new concession. They include 8 additional vehicles; power supply upgrades; stop and vehicle upgrades to comply with Disability Discrimination Act and Rail Vehicle Accessibility Regulations; major infrastructure works including the upgrade and renewal of track. The total cost of these proposals is GBP102m, to be phased over 4 years between 2005/06 and 2008/09. They received Government approval on 6 July 2006.
Phase 3
There will be two stages for Phase 3. The first stage (3a) was approved on 6 July 2006. Conversion of the Oldham and Rochdale line and building part of the South Manchester line to Chorlton will be funded from part of the GBP520m budget reinstated on 16 December 2004. The East Manchester line to Droylsden will be funded by GMPTE borrowings, to be repaid over 30 years from Metrolink revenue.
Phase 3b will be the Oldham and Rochdale town centre lines, Droylsden to Ashton-under-Lyne, the lines to East Didsbury and the Airport from Chorlton. The funding for Phase 3b will be a key part of the GMPTE 2007 Transport Innovation Fund bid.
Transport Innovation Fund (TIF)
In November 2006 Greater Manchester was awarded GBP1.95 million alongside the GBP1.25 million from November 2005. These ‘pump priming’ funds will be used to look at strategic options for boosting public transport and cutting local traffic congestion.
The Association of Greater Manchester Authorities (AGMA) have agreed that four tests must be satisfied before the introduction of congestion charging measures could be considered for Greater Manchester. These tests will be subject to full and detailed scrutiny by the AGMA leaders, supported by a panel of independent business leaders and academic experts.
The four tests are:
- There must be significant investment in public transport improvements including Metrolink and enhanced capacity must be in place prior to introducing a charging scheme.
- Measures must complement the competitiveness and inclusion priorities of the sub-region and not undermine the competitiveness of the regional centre or the town centres in the area.
- Measures must be acceptable, both to the public and also to the business community.
- Measures must be relevant to where congestion exists or where it may emerge in the future notwithstanding the advent of public transport improvements.
TIF Bid Agreed and Submitted
On 27 July 2007 the Association of Greater Manchester Authorities (AGMA) agreed to submit a bid to the Government’s Transport Innovation Fund (TIF). This would bring a 3 billion pound package of transport funding and the introduction of a road congestion charging system.
Public transport in Greater Manchester would be vastly improved; including an expanded Metrolink network, longer trains on many of the conurbation's rail lines and more frequent, high quality bus services. Other schemes including Park and Ride and Yellow School Bus services would be part of the largest and most far-reaching transport investment programme outside London, alongside measures to ensure effective integration across all transport services.
The agreed bid would also involve the introduction of a locally designed congestion charging system to target future congestion problems where they will have maximum impact of the economy and environment, with all charging revenues being retained for funding public transport improvements in Greater Manchester.
A report dated 27 July 2007 The future of transport in Greater Manchester is available on the GMPTE web site.
GMPTE and AGMA have a web site Our Future Transport which explains the proposals in detail.
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This page was written by Tony Williams, Manchester Area Officer, Light Rail Transit Association. Contact manwebm@lrta.org if you have any comments, ideas or suggestions about these pages.