Stagecoach Group has sold its subsidiary running Manchester’s trams to RATP, the state-owned operator of Paris’s public transport network.
The bus and rail operator sold SML, which has a 10-year contract to run Metrolink until July 2017 and assets of £16.2m, to RATP Dev UK, a wholly owned subsidiary of RATP.
The deal allows Stagecoach to focus on its core business of running bus and rail contracts ahead of a raft of franchises coming up for auction next year including West Coast Railways, which it runs with Virgin.
Stagecoach said it was a “good deal” for shareholders that did not signify any wider shift of strategy for the group. It said it was not engaged in any discussions regarding a sale of its tram operations in Sheffield and that it retained a bus company in Manchester.
RATP, one of the biggest transport companies globally, is the latest foreign operator to show interest in running British transport operations. The European transport market is in the process of being liberalised, forcing the continent’s state-owned companies to look further afield to gain market share.
Dutch-owned Ned Railways and German state-owned Deutsche Bahn already have rail franchises in the UK and are bidding for further contracts. Last year Arriva, the British bus and rail operator, was acquired by Deutsche Bahn.
In March RATP bought bus operators London United, with 10 per cent of the capital’s market, Bournemouth Transport Limited and Bath Bus Company, and now has more than 3,000 employees in the UK with a total turnover of about £200m. Metrolink has an annual turnover of about £40m.
“Metrolink is one of the UK’s most successful tram networks, so we are naturally delighted to join with the existing team to be able to bring our expertise and knowhow to continue its further development,” said Paul Matthews, RATP Dev UK’s chief executive, adding that it was a “significant deal” for the group. He told the Financial Times it would continue to seek acquisitions in the UK. “We wish to expand our UK presence as it is a strategic market for us,” he said
The Manchester network, serving 10 boroughs of Greater Manchester, has four lines providing about 21m passenger journeys each year. Three more, including an airport link, are scheduled to open next year with passenger journeys forecast at 33m.
RATP Group operates trams and light railways in cities including Paris, Mumbai and Florence, and carries 12m passengers daily. Transport for Greater Manchester, the council body that owns the system, said passengers would benefit from RATP’s expertise, particularly in smart ticketing.
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