Transport for West Midlands will take over the day-to-day running of the Midland Metro trams when a contract with National Express West Midlands ends next year.

The move will enable TfWM, which is the transport arm of the West Midlands Combined Authority, to plough millions of pounds of future profits back into expanding the network. Existing National Express staff will be transferred over to a new subsidiary company – Midland Metro Ltd – which will be wholly owned by the WMCA.

The combined authority is set to start a number of extensions which will see the network triple in size over the next decade, with passenger numbers forecast to increase from around 6.5 million at present to more than 30 million.

That is expected to generate profits of around £50 million over the first 11 years which the WMCA will be able to channel back into the network for the benefit of passengers and the local economy. Cllr Roger Lawrence, WMCA lead for transport, said:

“Metro is a fundamental part of our future plans not only for transport but for the West Midlands economy as a whole. It is embarking on an unprecedented period of expansion and we believe bringing services in house will provide the extra flexibility and adaptability needed to meet this exciting new chapter while generating millions of pounds for the benefit of passengers and taxpayers.

“I’d like to thank all National Express staff for operating the Midland Metro for the last 18 years. Through their hard work and dedication, tram passenger numbers have grown significantly and they have been nationally recognised for the high level of customer service they provide.”

Cllr Lawrence said the move and the transfer of staff over from National Express would ensure existing skills and expertise were retained helping to ensure the Metro’s 99 per cent reliability and its other strengths were taken forward.

Bringing operations ‘in house’ would also enable TfWM to introduce new lines, trams, technology and operational practices safely, efficiently and with best value to the public purse, he said.

In taking the decision, the WMCA board was told that if it decided to continue outsourcing tram services from October next year then the tendering process alone to appoint a private operator would cost taxpayers several million pounds.

Colin Saward, general manager of National Express Midlands Metro, added:

“It’s disappointing we won’t get the chance to run the tram service when our current contract is up next year. But we appreciate TfWM’s reasons for taking services back in house when the network is about to change so much.

“We will continue to work closely with TfWM to ensure a safe handover that is as smooth as possible for passengers and staff.”

The planned expansion of the Midland Metro network includes an extension of the route from New Street Station to Centenary Square, with services expected to start running in 2019.

A business case is also being prepared to extend the Metro from Wednesbury to Brierley Hill. Forthcoming extensions of the tram network will be built by the Midland Metro Alliance, a new partnership set up by WMCA.