The Tram – Jeannie, Jeannie, Jeannie BLOG 19th January 2018

The Tram

Jeannie, Jeannie, Jeannie BLOG 19th January 2018

THOUGHTS FOR THE DAY

I was both disturbed and surprised that the Nottingham Express Transit – The NET – The Nottingham Tram is losing so much money. Here is how the BBC reported it.

The company which runs Nottingham’s tram service could be unable to pay its debts in future, auditors have warned.

 

Tramlink Nottingham’s annual report showed the company was losing nearly £1m a week in the year up to March 2017, despite 15 million passengers using the service during that period.

 

The company lost more than £3 per trip – more than the price of a ticket.

 

Tramlink Nottingham said the loss was due to an impairment charge, but turnover increased by more than £15m.

 

The annual report shows losses of £48.51m, despite passenger numbers rising from 11.5 million in 2016.

 

In the year up to March 2017 – the first full year of operation since the latest extension of the service – the company had a turnover of about £60.63m, up from £44.53m in the previous financial year.

 

The tram system was extended in August 2015.

 

According to the annual report, which was audited by PricewaterhouseCoopers, there is a “potential risk” of the ratio between debt and cashflow agreed in Tramlink Nottingham’s financial model “being breached in the foreseeable future if no action is taken”.

 

It found concerns over how debts would be paid “indicate the material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern”.

 

But it also said the company was talking to lenders over “partial refinancing”.

 

A spokesman for Tramlink Nottingham said the company had reduced its debt by £4.8m in the most recent financial period, and that it was due to meet all the requirements of its contract, which runs until 2034.

 

They said: “The nature of private finance initiative (PFI) concessions is well-known. It is recognised that during the early years of any concession, the project carries a high level of commercial debt, reflecting the front-end cost of construction of the new infrastructure.”

 

TO ME:

 

The situation worries me. To date it is a brilliant system and so efficiently run. I’d hate to see that change but it will do if management start cost cutting to balance the books. You can’t increase the number of passengers too easily as the trams are so full anyway. Does the company own the car parks? Could a small car park levy be applied?

 

Should the Government and City/County Council be supporting it more? How much of the Workplace Parking Levy (WPL) is made available to the Tram. The WPL is a charge on employers who provide workplace parking, a type of congestion charging scheme that has been introduced in Nottingham. Money raised from the WPL goes towards NET Phase Two (the extensions to the existing tram system), the redevelopment of Nottingham Rail Station and also supports the popular Link bus network.

 

Tramlink Nottingham who run NET said the loss was due to an impairment charge.  What does that mean? “Impairment charge” is the new term for writing off worthless goodwill and amounted to £28.2m of the loss.

 

Finally how much does fare dodging cost the Tram. The inspectors do a brilliant job and catch lots of fare dodgers. But they cannot inspect every bit of every journey. I often see people nonchalantly make a sudden decision to leave the tram as Inspectors board. The Inspectors are wised up to this but can’t have eyes everywhere.

 

There are no easy answers to eliminate losses, but we need that tram service so hopefully some intelligent folk, more intelligent than me who have been to university, will focus sensibly on the problem and come up with answers.

 

INSPIRATIONAL QUOTE FOR THE DAY

Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health – Dalai Lama

HAPPINESS IS…

Happiness is…listening in to other folks’ conversations on the tram

GRANDAD’S ONE LINER JOKE OF THE DAY

Always speak well of your enemies. After all, you made them

LOVE IS…

Love is…same time, same place

TRACK OF THE DAY

Needles and Pins – The Searchers

Highest Chart Position: No.1 6th February 1964