Exclusive: TfL took legal advice on cancelling First Group tram contract after fatal Croydon crash
Transport for London (TfL) was considering cancelling Tram Operations Limited’s (TOL) contract to run the Croydon tram network in the aftermath of 2016’s fatal crash, but concluded it would be too difficult to do so.
Morning Wire has obtained TfL documents from 2017 showing that the transport operator received legal advice on whether it could cancel the 30-year deal while carrying out an audit of the network.
The advice was given amid complaints from TfL officials that TOL – a subsidiary of First Group – had failed to cooperate with the investigation.
According to the note, TfL is entitled to terminate TOL’s contract if the company was found to be either in “material and serious default” or had committed “persistent breach” of conditions.
But, the note went on, it would be “difficult to enforce” the right to end the contract “in practice”.
An attempt to break the contract on the condition “material and serious default”, it said, could be triggered by “evidence of systemic failure” – although TOL would first have the opportunity to “remedy the breach or agree a remediation plan”.
“Persistent breach” was defined as “a long process of raising minor breach events, which has to take place over a minimum of a year”.
Both TOL and TfL have carried out audits of the network which had identified that the management of fatigue was a recurring issue.
In 2014, a third party audit of the Croydon tram network identified fatigue management as one of seven weaknesses, as Morning Wire has revealed. The report was carried out by Abstracked Solutions of TOL’s behalf, and seen by TfL officials.
Furthermore, the initial draft of the 2017 audit found that TOL’s fatigue management systems “require[d] improvement”. However, this was subsequently removed to appease FTSE-listed First Group, as Morning Wire has revealed.
The legal note also raised the possibility of a negotiated end to the contract, but added that there had been “no engagement” with TOL on this option.
“It should be expected that their appetite to engage will be affected by their view of the reputational damage that an early exit might generate”, the note said.
“This is likely to include an expectation that leaving before the RAIB report (into the Sandilands crash) is published would reflect badly on First Group and be perceived as some form of admission of fault.”
The note also raised concerns that First Group would require financial compensation in the event of a negotiated settlement. Officials estimated that such a deal could cost TfL between £5m and £15m.
A TfL spokesperson said: “Since the tragic incident at Sandilands we have introduced a wide range of additional safety measures to make sure such a tragedy can never happen again.
“In the months after the incident we explored all contract options. Based on the available information and given the PFI contractual arrangements and limited rights of termination we concluded that it would have been difficult to enforce the option to end the contract with TOL. We continue to assist with all ongoing investigations into the tragedy at Sandilands.”
The 2017 audit of TOL’s fatigue management systems commenced after a number of reports of tram drivers asleep at the controls on the network.
These came just a few months after the Sandilands crash, in which seven people were killed when a tram overturned on the tracks.
An independent report into the accident later concluded that the driver had had a “microsleep episode”.
At the time, TfL officials had complained that TOL had shown a “grudging lack of cooperation” with its investigation, Morning Wire has revealed.
The legal note references plans for the Mayor of London, Sadiq Khan, to make TfL’s “frustration” with TOL’s conduct known at an upcoming meeting of the transport operator’s safety panel.
Despite their complaints, internal correspondence related to the audit showed that TfL officials took the decision to water down the report in order to appease the company.
A First Group spokesperson said: “We have always worked collaboratively with Transport for London to improve Croydon’s trams. Under our contract TfL sets the timetable and specifications for overall performance, while Tram Operations Limited runs trams on a day-to-day basis.
“Since the tragic incident at Sandilands, we have cooperated fully with all ongoing investigations and have worked with TfL to implement additional safety measures on the network. Safety is a core value for FirstGroup and our commitment to the safety of our passengers, our employees and others who engage with us is unwavering.”