Tramlink, which operates Nottingham Express Transit (NET), has completed a financial restructuring project which has secured the future of the network for the next ten years.
The news follows the successful renegotiation of loan terms from lenders, and was necessary to avoid further and ongoing breaches of banking covenants. It puts the concession, which allows Tramlink to run the NET tram system, in a stable position to move forward, following significant market changes.
The network is still feeling the effects of the pandemic, with passenger figures remaining around 80% of pre-COVID levels. Meanwhile, the impact of rising electricity costs as well as a period of sustained hyper-inflation are all contributing towards a changing market dynamic.
However, the move, which has been praised by Nottingham City Council and the Department for Transport, will ensure NET can continue to offer a green, convenient and affordable way to travel through the city and the surrounding areas.
The deal, which has been two years in the making, will also allow the team to focus on improvements across the board, including investment in new technology, the recruitment of more revenue protection officers and updates to ticketing systems. It will also allow them to look to the future with possible expansions to the network.
Tim Hesketh, CEO of Tramlink, said: “Nottingham’s trams are an integral part of the city’s life, helping to connect thousands of people each day who rely on the network to travel to work, to their place of study, or for days out with family and friends.
“This new financial restructuring has been an ongoing project we’ve been working on for two years following the challenges we faced during the pandemic. There will be no changes to our customers in terms of how they use the trams as a result, and they can still expect the same great service from us.
“However, it gives us a secure financial position which will ensure we can keep on providing the people of Nottingham with reliable, convenient and sustainable travel for many years to come, whilst also allowing us to make key improvements across the whole network.
“We’d like to thank the City Council and Department of Transport for all their support as we look ahead to a brighter future for the city.”
Tramlink has been the private investment partner in the Nottingham Tram since 2011, when Nottingham City Council entered into a Private Finance Initiative (PFI) with the business to build NET Phase Two and operate the extended tram system. Under the PFI, Nottingham City Council has a range of financial commitments, including annual payments to NET for the ongoing operation and maintenance of the whole service.
The council has welcomed the restructuring during a difficult time.
Councillor Angela Kandola, Nottingham City Council’s Portfolio Holder for Transport, said: “This deal to secure the future of our tram system post pandemic is great news for Nottingham, reflecting the culmination of nearly two years of collaborative effort among Tramlink, shareholders, lenders, ourselves, and the DfT.
“Given the current financial challenge being faced by the city council, it is even more important that we have worked with partners to secure a thriving future for our system – a cornerstone achievement in our mission to offer top-tier public transport, alleviate congestion, achieve cleaner air and less emissions and foster local economic growth.
“This achievement not only ensures financial stability for our tram network but also empowers Tramlink to focus on making the network even more successful and useful going forwards.”
