£400m new fleet for Merseyrail could begin to enter service later this decade, attracting new users to the network and reducing operational costs

 
merseyrail_trainVisualisation of a new Merseyrail train

 

Merseytravel is planning to replace its Merseyrail concession’s fleet in the early 2020s at the latest and will buy and own the new trains itself rather than leasing them. It expects to begin procurement this year with a preferred bidder to supply and maintain the new fleet identified by the end of 2016.

The announcement followed completion of a business case which showed a new fleet would offer greater value for money than further refurbishment of Merseyrail’s Class 507/8 trains followed by their replacement in the 2030s when they would be 55 years old.

The new fleet will be designed to attract new users and cater for rising patronage through a metro-style interior which will provide significantly greater capacity than the current trains as well as improved customer information and Wi-Fi facilities. Each new electric multiple unit would have space for 480 passengers compared to 303 on the current trainsets. Merseytravel said patronage is expected to rise 40% by 2028 on a network already close to capacity in some areas at peak times.

In addition to a new fleet, the £400m project will involve bolstering the network’s power supply and modifying platforms to allow faster journeys and timetable improvements, plus modernising Merseyrail’s depots.

Significant operating cost reductions are expected. Merseytravel estimates that improved rolling stock reliability alongside the new timetable would mean 52 EMUs are required for Merseyrail’s service compared to 59 at present, although Merseytravel said a “considerably larger fleet” may be required to cater for future demand and network expansion. Driver controlled operation would provide further cost savings with Merseytravel intending to transfer guards to customer service roles and other departments.

In addition, the new fleet would be ‘future proofed’ for dual voltage capability in line with Merseytravel’s ambitions to extend services from the city’s third rail network to destinations including Crewe and Warrington. 

Merseytravel anticipates that the increased capacity, faster journey times and new journey opportunities would be worth £70m per year to the city region’s economy and create 1,000 new jobs.

“This is not just about new trains, but what they will enable us to do,” Merseytravel chief executive David Brown said. “They will help us improve links within and beyond the city region, supporting our own ambitions and those of the wider ‘Northern Powerhouse’ agenda, as well as benefitting us in very real economic terms.”

Merseytravel said funding sources for the project would include its own reserves and borrowing from the Treasury’s Public Works Loans Board, and avoid any increase council tax. Potential funding from the European Investment Bank and Network Rail will also be explored.

Making the case for direct ownership of the fleet rather than leasing the trains under the rail industry’s established model, Merseytravel said that as a public sector body it would be able to raise finance at lower cost than a leasing company and would “develop the capability to operate as an effective rolling stock owner, mirroring the approach taken in the UK’s metro and tram markets”. 

Local politicians on the Merseytravel Committee will be asked to approve the new fleet procurement next month.

However, aspects of the project have already encountered opposition from trade unions which have a history of influencing Merseytravel’s decisions including shelving the passenger transport executive’s ambitions to take over ownership of the region’s railway infrastructure from Network Rail.

The RMT said it would oppose driver only operation, claiming there would be negative impacts on safety and customer service and that Merseytravel had refused to rule out compulsory redundancies.

 
The case: Three fleet scenarios

Merseytravel’s economic assessment of the options for replacing Merseyrail’s fleet show the benefits compared to a ‘do nothing’ scenario would be worth up to £368m, with earlier fleet replacement the most effective option.

In purely financial terms, the analysis also showed the project would pay for itself from increased revenue and lower operating costs. Over a period to 2053, Merseytravel estimated a positive financial impact of £118.5m. However, the analysis emphasised “the need
to ensure that the operational cost savings are delivered” to provide a positive financial case.

Scenario One: Replace fleet in late 2010s/early 2020s
Economic assessment: net present value of benefits vs ‘do nothing’ = £368.0m
Financial assessment: cash balance at 2053 = £118.5m

Scenario Two: Replace fleet in mid-2020s
Economic assessment: net present value of benefits vs ‘do nothing’ = £254.2m
Financial assessment: cash balance at 2053 = £90.3m

Scenario Three: Refurbishment/replace fleet in mid-2030s
Economic assessment: net present value of benefits vs ‘do nothing’ = £32.7m
Financial assessment: cash balance at 2053 = -£815.7m

 
This article appears inside the latest issue of Passenger Transport.

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