Management of Metro to be taken in-house? Will it improve matters?

March 16, 2016 2:22 PM
By Greg Stone
It has been an open secret for many months that Metro under-performance is an increasing concern and that DB Regio did not wish to extend the contract, says Cllr Greg Stone, Liberal Democrat transport spokesman on Newcastle City Council
This decision now looks set to transfer operational management back to Nexus (reporting to NECA), albeit using the same network, stock, management and staff as the current arrangements. As such, this may not necessarily prove to be a magic wand when it comes to solving Metro performance issues.
Whilst some may be tempted to see this as a positive step, it is not yet certain that this change will lead to better network performance and improved passenger satisfaction.
I have this afternoon written to Nexus's Managing Director asking for further information on a number of points which are not clear from the statement and NELB report.
In particular I have asked for further clarity on the size and scope of the proposed "investment package" for 2017-19, and for guarantees that performance will improve under the Nexus management arrangements.
Given that DB Regio was subject to fines for contractual under-performance, it would be helpful to establish whether Nexus will be similarly subject to such penalties.
Further information is also required in respect of how Nexus will address already identified staff shortages relating to driver availability and scheduling which have been experienced by DB Regio.
Questions to Nexus MD:
1) What are the proposed managing and reporting arrangements for the Nexus direct operation model?
2) What additional costs are likely to be incurred by the decision not to extend the contract beyond the 2017 break point?
3) What consideration has been given to alternatives including re-tendering of the contract?
4) What advice has been received from DfT in terms of a requirement for ongoing private sector involvement?
5) What assurances can you provide on TUPE transfer of DBTW staff to Nexus in terms of security of employment, pay and conditions?
6) What is the value of the investment package over the final years of the contract, and what it is envisaged that this will include?
7) What is the estimated cost of the additional staff resource identified at 4.7 of the NELB report?
8) What guarantees are you able to provide that performance will improve under the Nexus management arrangements?
9) What penalties will be incurred if the in-house management arrangements fail to meet the performance levels specified in the DB Regio contract?
The Railway Gazette announced the changes thus :

UK: Transport authority Nexus announced on March 14 that it had recommended that the North East Combined Authority not take up an option for a two-year extension of DB Regio's contract to operate Tyne & Wear Metro services.

Subject to combined authority approval, train operations and station management on the electrified network serving Newcastle and Sunderland would be taken in-house for two years when the current seven-year contract ends on April 1 2017. This would provide time for a long-term investment strategy to be finalised and a new operating contract to be let.

Nexus said both it and DB Regio Tyne & Wear Ltd were 'dissatisfied with the structure and the financial and operational performance of the current contract', and 'passenger outcomes are not where either party would want them to be.'

Talks are ongoing with the government to secure funding for the procurement of a new fleet which would be delivered in the first half of the 2020s. A business case and draft specification is expected to be completed in mid-2016. Options for the future which are to be considered by Nexus include bundling the supply of the new rolling stock with train operations under a build and operate concession.

'Managing Metro directly for a limited period will allow Nexus to prepare the Metro business for the significant change that will come with further investment of more than £400m in a new train fleet in the coming years', said Nexus Managing Director Tobyn Hughes.