Nottingham City Council has awarded the contract to operate and extend the city’s flagship light rail system to a new consortium led by French manufacturer Alstom, transport group Keolis and Wellglade, the parent company of award-winning bus operator TrentBarton.

The deal is a blow to the system’s current operator Arrow Light Rail, which is formed of transport group Veolia Transdev, Canadian manufacturer Bombardier and Nottingham City Transport, the arms-length bus operator that is owned by the council.

The announcement of the deal with Tramlink Nottingham, which also comprises contractor Vinci, fund manager Meridiam and private equity specialist Infravia, follows an extensive competitive process and evaluation of the bids from the two consortia.

The council will now enter a final period of negotiation with the winning bidder and it is expected that a new 23-year concession contract will be awarded in late summer.

The Department for Transport confirmed last week that it is to make funding available for the expansion of the light rail network with two additional lines to Chilwell and Clifton, with the tram fleet more than doubling to 37 vehicles.

The future of the project had been stalled following the Comprehensive Spending Review last year, but the green light was given after cost savings were identified to make the project more affordable.

Commenting on the contract award the chairman of Tramlink Nottingham, Roger Harrison, said: “We have put together an extremely strong partnership and we are confident of being able to create a network which will not only be efficient and effective in terms of meeting the city’s transport needs but which will also help to take Nottingham’s international status to a new level.”