Tram contract finalised

MELBOURNE'S tram contract has been finalised.  Keolis Downer EDI (KDR) will run the tram network for 8 years with a further 7 year option from November 30 this year.  The 'Yarra Trams' brand will be retained.

According to the Victorian Government, the new eight year operating contract with KDR will deliver:

  • Cleaner and safer trams;
  • Improved maintenance procedures to maximise fleet availability and reduce cancellations;
  • Increased activity to remove litter and graffiti on and around the network;
  • Better customer information at tram stops, focusing on route details and fares;
  • Improve tram punctuality from 78 per cent of services on time to 82 per cent through the duration of the contract;
  • Major works to upgrade tram tracks to improve passenger comfort and reduce maintenance; and
  • Oversee the procurement and introduction of 50 new low floor trams from 2012.

KDR will receive an annual state subsidy of $97 million a year and the contract is valued at approximately $2.8 billion over the eight year term.

In return, KDR will operate the tram network for eight years with a possible extension for another seven and receive an annual state subsidy of $97 million a year.

In its ASX announcement, Downer EDI Managing Director and CEO, Geoff Knox said "this is a significant win for the Downer Group at a time when light rail is making renaissance throughout the world," and that "Melbourne's tram network is one of the most significant tram systems in the world.  Downer and Keolis are fully committed to working with the Victorian Government to deliver a world-class transport solution for Melbourne and its strategic objectives for the future."

At the time of writing, shares in Downer EDI were up 11 cents or 1.37 per cent to $8.12.

KDR is a joint venture between Downer EDI and French transport company Keolis.  KDR will take control of the tram network from Monday, November 30, 2009.

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