Govia keeps rail franchise with deal to spend £15m on services
GOVIA Thameslink Railway (GTR) will keep Britain’s biggest rail franchise but will pay out £15m to improve services after its “unacceptable performance” contributed to a bungled timetable roll-out earlier this year.
GTR’s parent company Go-Ahead announced yesterday that it had struck a deal with the Department for Trans- port (DfT) that means it will hang on to the South East rail network, but will have to fund “passenger enhancements” this year.
The DfT concluded that a termination of the franchise “would cause further and undue disruption for passengers and is not an appropriate course of action”.
However, Go-Ahead revealed that its overall profits would not be knocked off course by the Government sanctions, sparking anger among rail users who suggested that the decision by Chris Grayling, the Transport Secretary, was a “whitewash”. Fears were raised earlier this year that Govia, a joint venture between Go-Ahead and French state-backed company Keolis, could lose the GTR contract after a botched timetable shake-up left passengers stranded amid numerous cancellations.
Under the new agreement, GTR will not be allowed to make a profit from the franchise for the remainder of the financial year. The amount of profit that the group can make will also be capped until the end of the franchise, which runs until September 2021.
Profit margins on the franchise will now be between 0.75pc to 1pc, compared with a previous range of 0.75pc to 1.5pc. Despite this, Go-Ahead said its “full year expectations for the current financial year remain unchanged”. The company expects to make £96.1m of pre-tax profit this year.
Emily Yates, co-founder of the Association of British Commuters, said: “Today we’ve witnessed yet another whitewash on the GTR contract. The £15m ‘improvement package’ announced today closely resembles last year’s bail-out of GTR by the Government, which let them buy out their liability for performance.
“That scandalous decision now means that GTR will go mostly unpunished for the May timetable collapse.”
Lilian Greenwood, chairman of the transport select committee, which published a report into the timetable chaos this week, said: “Our report said the DfT was complacent in its attitudes towards [passengers] and still today, the Secretary of State hasn’t got the message.”
Shares in the FTSE 250 company closed down 1.8pc at £16.12.