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WMCA allocates £16m to public bike hire

07 August 2020

The West Midlands Combined Authority is to contribute £15.8m over five years to a new public bike hire scheme for the conurbation.

A procurement exercise for the service contract is nearing completion, with talks taking place with a preferred supplier.  A six-month implementation programme is expected to get underway next spring.

The new contract replaces the bike hire contract awarded to Nextbike in August 2018. The company had its contracted terminated last July after what WMCA said were “numerous contract breaches”. 

Twelve suppliers expressed interest in the new contract. All said they wanted to see financial support provided by the combined authority. Three firms were shortlisted.  

The contract is for an initial five years with a possible three-year extension. 

The supplier will initially provide 1,500 bikes: 150 ebikes and 1,350 pedal bikes. It will be responsible for maintaining the bikes and docking stations. 

Ebikes will be powered by swappable batteries. 

The docking stations will be easy to relocate, for instance for events such as the Commonwealth Games in Birmingham in 2022.

Transport for the West Midlands will work with the supplier to integrate bike hire into the Swift public transport smart ticketing scheme. Users will also be able to hire a bike via the supplier’s own payment system. 

Bike hire charges will be set by TfWM.  “This enables control of the revenue that’s generated and to implement special tariffs for groups that we are actively looking to engage with the scheme,” said Stuart Everton, the Black Country’s director of transport, in a report to the WMCA. 

The £15.8m cost of the scheme to WMCA includes VAT paid on income. A corporate sponsor will be sought. 

The WMCA forecasts that, in a central case, the scheme will still record an operating deficit of £2.7m over five years. “The project will break-even if revenues amount to circa 56 per cent over the standard, central case estimate,” said Everton. TfWM is will set aside £4.6m over the five years to cover potential losses. 

The supplier is promising to  create 25 jobs in the region.

Acknowledging the conurbation’s upcoming e-scooter trials, Everton said: “Whilst the implementation of e-scooters provides opportunities and risks to the bikeshare scheme, if the schemes work together or are combined then they have the potential to complement each other.”

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