Nottingham tram network secured following loan negotiations

Tramlink, which operates Nottingham Express Transit (NET), has avoided further breaches of its banking covenants by completing a financial restructuring project which has secured the future of the network for the next ten years.

The deal, two years in the making, follows the renegotiation of loan terms from lenders. Tramlink says the move will allow it to look to the future with possible expansions to the network.

Tim Hesketh, CEO of Tramlink said: “Nottingham’s trams are an integral part of the city’s life, helping to connect thousands of people each day who rely on the network to travel to work, to their place of study, or for days out with family and friends.

“This new financial restructuring has been an ongoing project we’ve been working on for two years following the challenges we faced during the pandemic. There will be no changes to our customers in terms of how they use the trams as a result, and they can still expect the same great service from us. However, it gives us a secure financial position which will ensure we can keep on providing the people of Nottingham with reliable, convenient and sustainable travel for many years to come, whilst also allowing us to make key improvements across the whole network.

“We’d like to thank the City Council and Department of Transport for all their support as we look ahead to a brighter future for the city.”

Tramlink has been the private investment partner in the Nottingham Tram since 2011, when Nottingham City Council entered into a Private Finance Initiative (PFI) with the business to build NET Phase Two and operate the extended tram system. Under the PFI, Nottingham City Council has a range of financial commitments, including annual payments to NET for the ongoing operation and maintenance of the whole service.

The city council, which is under severe financial strain, has welcomed the restructuring.

Councillor Angela Kandola, Nottingham City Council’s Portfolio Holder for Transport said: “This deal to secure the future of our tram system post pandemic is great news for Nottingham, reflecting the culmination of nearly two years of collaborative effort among Tramlink, shareholders, lenders, ourselves, and the DfT.

“Given the current financial challenge being faced by the city council, it is even more important that we have worked with partners to secure a thriving future for our system – a cornerstone achievement in our mission to offer top-tier public transport, alleviate congestion, achieve cleaner air and less emissions and foster local economic growth. This achievement not only ensures financial stability for our tram network but also empowers Tramlink to focus on making the network even more successful and useful going forwards.”