New operator to take over Melbourne tram network

Melbourne’s tram network will be handed over to a new operator at the end of this year, with promises of improved reliability and customer service on the world’s largest light-rail system.

Victorian Public Transport Minister Gabrielle Williams said on Friday morning that Keolis Downer’s contract would not be renewed. The company has run the network for the past 14 years.

Melbourne’s tram network is the largest in the world. Credit: Penny Stephens

French outfit Transdev and Chinese-government-owned construction giant John Holland will take over from December 1 and run the network for nine years under a contract worth $6.8 billion.

Williams said the new contract included strict benchmarks for service performance, and new technology would be rolled out to give passengers better real-time information about tram arrivals.

“Melbourne is home to the largest tram network in the world, and this new contract will make sure our trams continue to move Victorians around safely, quickly and easily,” Williams said.

Transdev and John Holland outbid Keolis Downer and another shortlisted consortium led by Melbourne-based SkyBus owner Kinetic.

Public Transport Users Association spokesman Daniel Bowen said he hoped the new operator would deliver better real-time arrival information and improve cleanliness and punctuality.

However, he said it was up to the state government to deliver the network’s most pressing upgrades: accessible low-floor trams and stops, on-road priority so trams aren’t delayed by traffic, and more frequent services – particularly in the evenings.

“You’re waiting on most routes 30 minutes between services on Sunday evening – that’s up to the government to commit to fixing,” Bowen said.

John Holland, which is building Victoria’s Metro Tunnel and the West Gate Tunnel Project, is a partner in Metro Trains.

Metro’s contract was due to expire at the end of 2024, but the state government extended it by 18 months in 2023 to mid-2026 to avoid changing operators during testing for the Metro Tunnel, which is due to open in 2025.

Last month, the Allan government granted Metro another 18-month extension, meaning it will run the train network until at least November 2027.

Rail Tram and Bus Union Victoria secretary Vik Sharma said he welcomed the government’s commitment to service improvements through the new contract, which “members have long been waiting for”.

“This is positive news for members’ job security and opportunities into the future, supported by additional training for staff to support our diverse travelling community,” Sharma said.

Transdev operates transit systems in 19 countries and was part of a consortium that ran Yarra Trams from 1999 to 2009. It also ran about one-third of Melbourne’s bus network from 2013 to 2022.

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