Tramlink, the company responsible for operating the Nottingham Express Transit (NET) tram system, has announced the successful completion of a financial restructuring that will guarantee its stability for the next decade.
Following two years of negotiations, Tramlink has finalized new loan terms with its lenders, a pivotal move to prevent further breaches of banking covenants. The company, which oversees the twenty-mile NET tram system under a Private Finance initiative (PFI), is confident that this new agreement positions it strongly to progress despite significant market shifts and challenges posed by the pandemic.
While passenger numbers have not fully recovered from the pandemic’s impact, currently standing at approximately eighty percent of pre-lockdown levels, Tramlink has encountered financial hurdles due to escalating electricity costs and sustained high inflation.
Nottingham City Council and the Department for Transport have greeted Tramlink’s announcement, acknowledging that this financial restructuring will ensure the ongoing provision of an environmentally-friendly, convenient, and affordable mode of transportation for Nottingham residents and its surrounding areas.
Following the conclusion of negotiations, Tramlink is now prepared to concentrate on implementing various improvements, including the integration of new technology, the recruitment of additional revenue protection officers, and the updating of ticketing systems. The company also intends to explore potential expansions to the current network.
The Nottingham tram system commenced operations in 2004, and Tramlink has been a significant private investment partner since 2011, when Nottingham City Council entered into a Private Finance Initiative (PFI) to construct NET Phase Two and supervise the extended tram system. Despite delays, Phase 2 eventually opened in 2015.
Under this PFI agreement, Nottingham City Council makes annual payments to NET for its operation and maintenance. Tramlink is a consortium that sub-contracts the tram operations to Nottingham Trams Limited, a company formed by its consortium members Keolis (80%) and Wellglade (20%), and also sub-contracts maintenance to Alstom, another consortium member.
Further information about Tramlink can be found here.
Tim Hesketh, CEO of Tramlink, expressed his gratitude for the support received throughout the financial restructuring process and its significance in securing the future of Nottingham’s tram system. He underscored that customers can anticipate the same high-quality service, while the company now boasts a secure financial foundation to continue delivering reliable, convenient, and sustainable travel for years to come, along with implementing significant improvements across the entire network.
Councillor Angela Kandola, Nottingham City Council’s Portfolio Holder for Transport, echoed the sentiment of gratitude, noting the collaborative effort that led to the successful conclusion of the deal. She emphasized the importance of securing the future of the tram system, especially in light of current financial challenges, and highlighted the positive impact this achievement will have on public transport, congestion reduction, environmental sustainability, and local economic growth.
In conclusion, Tramlink’s successful financial restructuring represents a significant milestone, ensuring the continuation of an important mode of transportation in Nottingham while also paving the way for future enhancements and expansions.
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