Shoddy deal hands rail firm £9bn ... but YOU get £50m compensation bill!

MINISTERS faced fierce criticism last night for awarding Southern Rail’s parent company a £9 billion contract that forces the taxpayer to compensate delayed travellers.

The extraordinary – and unique – deal has left taxpayers on the hook for £50 million in compensation and lost ticket sales during the current dispute, while providing little incentive for rail chiefs to improve services.

Govia Thameslink Railway was awarded the seven-year, £8.9 billion contract until September 2021. In return for handing all money from fares to the Government, it gets a guaranteed payment a year, escapes liability to compensate commuters for delays and cancellations and apparently has little penalty for failing to provide a quality service.

While the contract does stipulate Govia has to hit certain targets, it is shrouded in secrecy and both Govia and the Government have refused demands from MPs to give further details.

Anger over the contract came on another day of misery for passengers across the Southern network.

A second day of combined strikes by drivers and train guards wiped out all 2,242 weekday services yesterday, while talks aimed at bringing the long-running dispute were adjourned last night, leaving passengers facing another 24-hour strike on Friday.

And even though there is a temporary pause in the strike action today, the disruption will continue. Southern said services will be ‘severely impacted’ as ‘some trains and crew will still not be in position’.

Last night, Louise Ellman, Labour MP and chairman of the cross-party transport select committee, said: ‘The appalling situation on Southern Rail has continued for far too long. The Government has failed to manage a franchise that was too large.

‘Govia receives a billion pounds per year management fee while the public sector faces a possible shortfall of £38million. Meanwhile, the Department for Transport has failed to meet its deadline for deciding whether Southern’s operator, Govia, is in breach of contract for poor operational performance. ‘This situation cannot continue.’ Under the £8.9 billion contract, the Government is responsible for paying compensation to passengers for delays and cancellations. The taxpayer also loses out if revenues from tickets falls.

This arrangement is set to cost taxpayers more than £50million during the current dispute, including £38million for the fall in revenue from ticket sales and up to £15 million in compensation the Government has promised to pay. Meanwhile Govia is saving an estimated £1.1 million in pay for striking drivers and conductors.

The firm has insisted the disruption caused by the strikes is a ‘force majeure’ – or beyond its control – which it cannot legally be held liable for. The Government says it is still deciding whether to accept this.

No other rail operator in the country has been given such a generous deal by ministers. But former transport secretary Patrick McLoughlin – since knighted and promoted to chairman of the Tory Party – thought it was the only way to persuade a rail operator to take over the giant Southern franchise.

The transport committee has claimed the service on Southern is so poor that it must have breached its contract. It has argued that the Government should consider stripping Govia of the franchise and awarding it to another operator.

Meanwhile, union bosses’ justification for the rail strikes lay in tatters last night as another independent watchdog rejected claims that driveronly trains has led to a surge in accidents.

In an effort to justify the strikes on Southern Rail, the general secretary of drivers’ union Aslef insisted that the introduction of driver-only trains had caused more people to fall between the platform and the train.

Mick Whelan told the BBC the trains, which enable drivers instead of guards to open and close the doors, had led to an ‘awful increase’ in accidents.

But his claims were refuted by the independent Rail Safety and Standards Board. It also dismissed bizarre claims from the £128,000-a-year union baron that the introduction of driveronly trains had somehow contributed to an increase in suicides.

The independent rail watchdog said the number of injuries caused by falls at platforms had actually dropped significantly in recent years following the introduction of the trains on many routes. It also told the Mail it was ‘not true to say that the number of suicides on the railway is increasing’.

The rebuttal will heap pressure on Mr Whelan, with the Office of Road and Rail also vouching for the safety of driver-only trains which have been operating around the country for decades. A signed document emerged earlier this week, showing that Mr Whelan agreed in October 2011 to the introduction of driver-only trains on Thameslink services, despite now claiming they are unsafe.

Grant Shapps, the former Tory chairman and chairman of the crossparty Big Infrastructure Group, said Aslef’s credibility ‘has been derailed by these figures’. He added: ‘Anything other than an immediate end to this strike action will show that it is time for the Government to step in and ban these economy-destroying strikes once and for all.’

Bosses at Govia yesterday met with Mr Whelan at the conciliation service Acas to try to break the deadlock.

Mick Cash, the general secretary of the Rail Maritime & Transport union, tried to join the talks but was barred because he had not been invited.

Talks will resume this morning. Southern urged passengers to check its website before travelling today.

Aslef did not respond for requests for comment last night.

Comment – Page 14

‘This situation cannot continue’ ‘Credibility has been derailed’