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	Light Rail News: Index 2002 > Melbourne - National Express to withdraw from tram operation; 17 December 2002

Melbourne - National Express to withdraw from tram operation

With effect from Tuesday 24 December the UK transport operator is to hand back its tram and train operations to the Victoria state Government. The transfer effects M> Trams (formerly Swanston Trams) serving Melbourne's northern and southern suburbs, M> Trains and V/Line Passenger rail and coach routes.

As a result the Victorian government will assume control of National Express Public Transport Services for at least 12 months to allow a restructuring of the system after which the government would seek to re-tender Melbourne's public transport services to create one tram and one train network. It would however consider allowing Connex to take over National Express metropolitan train assets and Yarra Trams to purchase National Express' tram business. The cost of operating the three National Express franchises would be met using AUD90 million set aside by the state government, and the company's AUD130 million performance bond which is held in trust.

It will cost some AUD215 million for National Express, which is the largest private operator of public transport in Australia, to write down its investments in the state of Victoria. The company is retaining its bus operations in four Australian cities.

Although they had improved the service delivery the train and tram businesses and had added 407 extra services per week on the M>Tram system the company was concerned that its agreement with the state government was becoming 'more stringent' during negotiations in the last year. This combined with an overestimate of the amount of fixed cost savings that could be made and the reported high level of fare evasion had led to the decision to withdraw.

Talks have previously taken place between National Express and the other operator, Yarra Trams, owned by Metrolink, comprising Australian infrastructure developer Transfield Services, with leading tram operator, Transdev. It is expected that Yarra Trams will soon make a statement on its position with regard to its acquiring the M> tram operation.

17 December 2002

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