Project background
The Midland Metro is a 20km urban light rail system connecting Birmingham Snow Hill to Wolverhampton town centre. It opened in 1999 and was built by Altram under a 23 year design, build operate and maintain concession contract. The public promoters of the scheme, Centro are in the process of developing two extensions for the network. The first extending the metro to the city centre and the second building a new line to Brierley Hill. As part of the development programme, key decisions affecting the business case needed to be made about the vehicle fleet size required for the extensions.
The client
Strategic Lines were part of the CJ Associates team which was contracted to Centro to provide a multi-disciplined management support role to Centro’s development team during the current phase of the project. CJ Associates have enjoyed a long term role on the Midland Metro working closely with their in-house team on commercial and technical aspects of both the existing line as well as planning the extensions.
Our role
A full life cycle cost analysis was carried out to enable strategic decisions to be made in respect of options for the existing 16 car fleet - built by Ansaldo under a finance lease. The key question to be addressed was whether to simply augment the existing fleet with a new vehicle fleet for the two extensions, or to replace the fleet entirely with a single new common fleet. We developed a life cycle model which analysed in net present value (NPV) terms which option represented the best value for Centro.
- Create and test the model
- Ascertain input data from a variety of sources, including current maintenance costs, lease termination values etc.
- Carry out sensitivity tests on results
- Analyse, report and presentation of results.
Status
The results of the study have now been taken forward by Centro and are a key aspect of the fleet procurement strategy - underpinning the project development and outline business case work.
- Application for Transport & Works Act powers 2003
- Life cycle study work was carried out during Spring 2004
- Transport & Works Act approval was granted in 2004
- Outline Business Case was submitted in 2005
- Total project is developing procurement options to match local and national funding availability.