Luas to make profit again in 2015, a year ahead of target
Published 02/09/2014 | 02:30
THE Luas is set to return to profitability in 2015, one year ahead of schedule.
The Rail Procurement Agency (RPA) yesterday announced that it would be renewing the Luas operating contract with Transdev Dublin Light Rail Limited, which will continue to run the tram system in the capital for the next five years.
The RPA said that through savings made in the signing of this new contract, it will now return to operating at a surplus in 2015.
In the 2013 RPA annual report released earlier this year, Rory O'Connor - the acting chief executive of the organisation - said that it is in its third-year of the five-year plan which aimed to return the Luas infrastructure business to operating at a surplus. Initially been aiming to achieve it by 2016.
However, it is expected that this target will now be achieved by 2015, and the 4.5pc growth in passenger trips last year has also been a key factor.
The new Luas operating contract is worth €150m and Transport Minister Paschal Donohoe was on hand to witness the signing.
Mr O'Connor said that securing the new contract with Transdev was a "great day for Luas", and revealed that the company beat three other organisations to secure the lucrative deal. "Transdev have won the contract again, and I think our customers have some great improvements to look forward to.
"Transdev have put in a very strong proposal in terms of improving customer service.
"So we are looking forward to the next five years. Four companies were interested in tendering. It was a very close-run contest," Mr O'Connor said.
He explained that the €150m contract will cover all of the operations and maintenance of the Luas system.
"We will probably take in €180m, so that's a good deal for us.
"And, we will be making a profit over the next five years, or breaking even at least," he added.
This positive development comes after the company suffered a deficit of €1.7m in 2013. This loss was "funded through the businesses accumulated cash surpluses".
Mr O'Connor said that Luas Cross City project remains on target to be completed by 2017, and that Transdev will play a role in the safety testing of the new routes across the city centre.
Speaking at the event, Mr Donohoe said that the success of the Luas "is evidenced by the fact that passenger numbers last year exceeded 30 million".
This rise represented an increase of eight million additional passengers since 2005, when the Luas was first introduced.
It is estimated that this growth will continue when the red and green lines are linked through the cross-city project.
Transdev has overseen the operation of the Luas for the last 10 years.