Metro pins hopes on bailout
LONGER-TERM DEAL IS SOUGHT AS TEMPORARY FUNDING RUNS OUT
METRO chiefs are hoping for a massive new bailout that will save the struggling network from £500,000-a-week losses.
The Tyne and Wear rail service has been given more than £16m by the Government so far to help it survive a massive drop in passenger numbers during the Covid-19 pandemic.
But that money will run out in just a few days and there has been no confirmation so far of a further funding package to prop up the Metro beyond Tuesday, August 4.
The Chronicle understands that a significant, longer-term deal is in the works, however, and awaiting final approval from Chancellor Rishi Sunak.
At the height of lockdown measures, the Metro was losing close to £1m every week as passenger levels dropped by up to 95%.
Metro use has now recovered to around a third of normal levels as travel restrictions have eased, but without government support the network would still suffer weekly losses of around £500,000.
While that shortfall could be covered for a short time by operator Nexus’s reserves, an emergency budget would ultimately have to be passed that could mean major cuts to train services.
Leader of Gateshead Council Martin Gannon, the chairman of the North East Joint Transport Committee, said: “From August 4 we will be having to bail out the Metro for about half a million pounds every week. The local authorities cannot sustain that.
“Although we would not immediately have to make changes, if we don’t get the support we need there will have to be an emergency budget and there would be substantial changes. “Discussions are at an advanced level and we are confident that we will get a package that would sustain the Metro through the current crisis and perhaps remove the necessity to keep going back for further trances of funding.”
The Department for Transport
confirmed that it is reviewing the case for extra funding for the Metro and other light rail systems across the UK.
A Nexus spokesperson said: “We remain in discussions with the Government about further financial support for the Tyne and Wear Metro.
“Metro is a vital service and we are seeing more passengers starting to use the network now that lockdown is lifting.
“However, passenger numbers are only around 35% of normal so it is vital that we continue to receive further revenue support beyond August 4.
“Providing we do broker further support, in the event it is not approved before August 4, our overall financial position is such that Metro and other services Nexus provides will not be affected in the intervening period.”
If we don’t get the support we need there will have to be an emergency budget
Martin Gannon, Leader of Gateshead Council