The Tyne and Wear Metro will become “completely unsustainable” unless the Government is willing to pay its massive electricity bills, a council leader has warned.
Transport officials now expect that the cost of the high voltage power used to run Metro trains across the region will be almost triple what was expected this year – jumping from an initial £8.4m to £21m because of the global energy crisis. While bosses at Nexus say they can absorb the pressure this year thanks to Government grant funding, which has propped up the network’s finances since the Covid pandemic hit, there are serious worries about what will happen next year.
Gateshead Council leader Martin Gannon claimed on Tuesday that, without an extension to the Energy Bill Relief Scheme, the Metro could be facing more than £5m worth of cuts in 2023/24 – meaning drastic reductions in services that could in turn cause a collapse in passenger numbers. He told the North East Joint Transport Committee (JTC): “Unless the Government extends that support, and it does not just affect the Metro, the system will become completely unsustainable.”
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The prospect of the Metro being mothballed due to uncertainties over central funding support became a worry for local leaders during the pandemic, with passenger numbers nosediving during lockdown. But even before Covid’s emergence there were warnings of the network being plunged into a “spiral of decline” if it had to scale back its timetables due to budget cuts.
Coun Gannon told the JTC that Nexus plans to use £8m of its cash reserves to help cover the escalating power bills from April next year, while the amount that the five local councils in Tyne and Wear give the system is also due to increase by around £5m. But, unless energy costs were to drop dramatically over the coming months, that would still leave a substantial funding gap.
The Labour leader said: “This is not just a Metro problem, it is all rail companies and other local authorities who run light rail systems. If the Government does not agree to extend the support for energy costs then the implication would be, with the extra money from the local authorities and using £8m of reserves, that we would still have to make in excess of £5m of reductions in service on the Metro.
“That would be reducing it to no more than a Sunday level of service, which would mean the farebox collapses and the system becomes unsustainable.”
Nexus managing director Martin Kearney told the committee that he had held “positive discussions” with civil servants about the issue, but that no firm commitments of funding support had been made. He added: “Financially, we are in a good position until April next year, then we are in a very challenging position from that date onwards.”
A Government spokesperson said: “We are working closely with the Tyne and Wear Metro to understand their needs for next year, having already provided more than £15m in support.”
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