The West Midlands Combined Authority (WMCA) is working to expand the tram network of Birmingham by 34km, with five major extensions to the system. Operations at the time were performed by National Express.
WMCA recognised the need to understand the expected financial performance of the operations, maintenance, renewals and extensions as a whole. Concurrently, the authority wished to develop a commercial proposition to tender certain aspects of the responsibilities to increase value for money.
The Steer project team developed a long term financial forecast for the system that included building up revenue, cost, capital expenditure and renewals forecasts from client data and incumbent reporting.
Key assumptions were discussed with the client, resulting in a number of scenarios and sensitives being generated. Commercial considerations were also scoped out and quantified where appropriate.
The scope of work was expanded to prepare a report that considered the risk profile and likely market responses associated with the various tendering options the client had identified.
Successes and outcomes
Based on the risk workshops jointly conducted by Steer and the final recommendations of the project, WMCA took the decision to take operations in-house during the expansion period.
Our project team provided training for the client in the modelling suite so that the models could be used directly by WMCA’s business planning function.
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