Move is part of planned £300m modernisation of light rail network

Operation of Supertram could return to the public sector in 2024

South Yorkshire PTE has announced that it’s preferred option is to take operation of the South Yorkshire Supertram network in-house when the current contract for operation of the network with Stagecoach ends in 2024.

The PTE outlined its thinking in a paper to the Sheffield City Region Combined Authority. That paper, which also proposes investment in modernising the system and a new fleet of trams, was due to be presented at a combined authority meeting that was cancelled as a result of the covid-19 pandemic.

Supertram opened in the mid 1990s with the PTE directly operating the network via a subsidiary company. As part of a government bailout of Supertram, caused by over-optimistic patronage projections in the development phase that failed to come to fruition, the PTE was required to sell the operating subsidiary to a private sector partner. Stagecoach came forward in 1997 and was let a concession for the operation of the system until March 2024.

With that contract now coming to an end, and Supertram approaching its third decade of operation, the PTE says a major renewal of the system is now needed as certain fundamental infrastructure elements become life-expired.

The option to refurbish the current fleet of trams in 2024 to extend their life by up to 15 years was considered by the PTE, but further work to assess the vehicles (undertaken by SNC Lavalin and completed October 2017) and the infrastructure (completed by Mott Macdonald in November 2017) indicated that the fleet should start to be replaced from 2024.

While the tram fleet has been found to be in good condition for their age, the PTE claims there are increasing issues with obsolete parts, particularly in the motor and auxiliary power supply systems. Traction power supply/substations, and supervision, control and communication systems also need to be replaced in the next few years. Meanwhile, the depot and stops are also in need of refurbishment according to the PTE.

It envisages a new fleet of 28 trams entering service by 2027. When combined with the three members of the recently introduced tram-train fleet that are used exclusively on Supertram services, this would enable a squadron of 31 vehicles. The introduction of this new fleet would support frequency improvements on the core blue and yellow routes to a frequency of 7.5 trams per hour.

Meanwhile, the PTE revealed six long-list options for the future operation, maintenance and renewal of the system were evaluated against ‘Green Book’ guidance from the Treasury. Three of these options have now been shortlisted:

  • Option 1 – public sector option where SYPTE establishes an arm’s length organisation to operate the services and maintain the network and fleet. SYPTE would separately procure the delivery of the network renewal. Proposals for operation to be reviewed when works complete;
  • Option 2 – SYPTE would contract with a private sector organisation to operate the system, maintain the network and rolling stock and SYPTE procures the delivery of the network renewal (similar to existing arrangements except for revenue risk); and
  • Option 3 – SYPTE would contract with a private sector organisation to operate the system, maintain the network and rolling stock and deliver the network renewal within a fixed budget.

“Of these options, Option 1 has the lowest overall cost and was considered best value for money,” said the PTE. “In parallel with this an option to enter into a short term (4-6 years) operating contract with a private sector operator (public sector retaining revenue risk) will be assessed alongside the public sector option. A review of how the system will be operated will be undertaken after the works are completed in 2028.”

The estimated final capital cost for the programme is £312.5m at 2018/19 prices, or £439m in outturn prices (i.e. including inflation).

“These are capital costs only and exclude costs associated with normal operation of the network while the works are carried out (2024 to 2028),” added the PTE.

It proposed that the Department for Transport meets £290.6m of this cost through grant funding with a local contribution of £21.m (representing 7% of the cost).