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Funding Metrolink in Manchester


Previous schemes, such as the Tyne and Wear Metro, were designed in detail by the public sector body and its consultants. The scheme was then 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.

Phase One saw a change in the way Light Rail schemes were designed and built in the United Kingdom. The Design Build Operate and Maintain (DBOM) contract was the only option. Phase 2 was also a DBOM contract.

Phase 3, for remaining lines, was to have been another DBOM contract. Increasing costs — see Metrolink Phase Three below resulted in the Government refusing funding in July 2004.

The Back On Track Campaign page describes events up to mid December 2004 when the Government reinstated GBP520 million funding — subject to GMPTE developing a satisfactory plan.

Proposals for Phase 1 and 2 Upgrades were sent to the DfT on 27 January 2005. The first round received Government approval on 6 July 2006 and the second round on 1 February 2008. More details at Phase 1 and 2 Upgrades below.

Greater Manchester’s new Integrated Transport Strategy was submitted Government on 8 April 2005. Under this plan there will be separate contracts for upgrading the existing system, providing additional vehicles, building the extensions, ongoing system maintenance and operating the whole network.

Phase 3 was split into two parts with 3a funded from part of the reinstated GBP520 million and GMPTE borrowings. The Greater Manchester Transport Fund is now enabling Phase 3b to be built.

Metrolink Phase One

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.

The network was to be built in stages and the first stage had to be able to stand on its own. Thus the Altrincham and Bury Lines with City Centre street running tracks were phase one of Metrolink.

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
Borrowings by GMPTA69
DoT Section 56 grant48
Borrowing from European Investment Bank15
European Regional Development Fund13

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

This is the Eccles Line from Cornbrook, on the Altrincham line, through Salford Quays and on to Eccles.

Phase 2 Funding
GMPTA Cash Reserves26
Borrowings by GMPTA17
European Regional Development Fund10

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

In March 2000 the Government accepted that it would be better if the Metrolink extensions were built as a single project rather than line by line. This was to have been another Design, Build, Operate and Maintain contract.

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 for Phase 1 and 2 Upgrades were sent to the DfT on 27 January 2005. The first round received Government approval on 6 July 2006 and the second round on 1 February 2008.

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.

Eight new high floor FLEXITY Swift trams were ordered in April 2007; they arrived at Metrolink during 2009. Track renewals; on Altrincham and Bury lines took place between May and September 2007; in city centre during autumn 2008 and April to October 2009.

GMPTE’s New Ticket Vending Machine (TVM) Project has replaced all Phase 1 and 2 TVMs. Installation started in October 2009 at St Peter’s Square and Piccadilly Gardens Stops and was completed during 2010. This project will also provide for the Phase 3 expansion.

The Overhead Line Equipment on the Altrincham line south of Cornbrook was replaced during the August 2009 blockade. Power Sub Stations will be upgraded to allow the unrestricted operation of up to nine double tram sets during peak periods.

The old Passenger Information Displays (PIDs) at stops have been removed; they were unreliable, providing incorrect information passengers. New visual displays that show real time passenger information will be rolled out to all Metrolink stops. A new control system for Phase 3a will operate these displays.

Phase 3

This was split into two stages. The first stage (3a) was approved on 6 July 2006, with final sign off on 16 May 2008. 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 is 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 was a key part of the GMPTE 2007 Transport Innovation Fund bid. These proposals were rejected by voters, in all Greater Manchester areas, in the referendum on 12 December 2008. More information on the Transport Innovation Fund 2007 bid page. The Association of Greater Manchester Authorities formally abandoned the bid on 19 December 2008.

Greater Manchester Transport Fund

Following the rejection of TIF proposals, transport officials reviewed the schemes from the bid. Those which did not require funding from congestion charging were re–prioritised on the basis of contribution to the economy.

The Association of Greater Manchester Authorities (AGMA) has agreed a Greater Manchester Transport Fund (GMTF) prioritising public transport and highway schemes involving an investment of over GBP1.5 billion. GMTF will be funded through contributions from local transport programmes, future GMITA levies and regional allocations which have been earmarked for Greater Manchester. This funding and prioritisation proposal has been submitted formally to the Secretary of State for approval.

Metrolink extensions funded are to Manchester Airport, East Didsbury, Ashton–under–Lyne and the town centres of Oldham and Rochdale, as well as a second city crossing between Victoria and G–Mex.

On 13 May 2009 the Vice Chair of Greater Manchester Integrated Transport Authority (GMITA) met with Transport Secretary Geoff Hoon as he welcomed the fast–tracking of two new Metrolink extensions to Ashton in Tameside and East Didsbury in South Manchester, as well as a package of cross–city bus improvements and new park–and–ride spaces. Mr Hoon also welcomed proposals to bring forward GBP195 million of government funding for the four schemes. The remaining funding for the GBP244 million schemes will come from local contributions.

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This page was written by Tony Williams, Manchester Area Officer, Light Rail Transit Association. Contact if you have any comments, ideas or suggestions about these pages.