Lockdown blamed for huge rail loss
Rail operator Abellio Scotrail has blamed the impact of the coronavirus lockdown for a £64.5 million black hole in its finances – despite lockdown only coming into force in the final weeks of the current accounting year.
In its latest financial statement, for the year ending March312020,thedutchtransportgiantpostedahugepre-tax loss of £64.5m.
The firm, which operates Scotland’srailservices,hadpreviously posted after-tax losses of £10m for the 15 months up to March 31 2019.
Abellio said in its statement lodged with Companies House that lockdown restrictions had hada“significant”impactonits fiscal fortunes.
However, the coronavirus lockdown only came into effect during the two weeks of the last accounting period, leading to questions over the large increase in losses.
In its statement, Abellio said: "As a result of government intervention telling people not to travel, there was a significant reduction in passengers travelling with Abellio Scotrail (up to 95% reduction on the prior year).”
The firm’s turnover for year was £917m, down £72m from thepreviousaccountingperiod, withpassengerrevenuedipping to £360m from £445m in 2019.
Abellio Scotrail’s subsidy from Transport Scotland increased to £526m over the course of 2020, which saw the transportoperatorfaceunprecedented challenges.
Since March of last year when the lockdown was announced, the Scottish Government has also been supplying the rail operatorwithemergencyfunding to plug the financial shortfallcausedbythesharpandsudden decline in passenger numbers.
Whiletheemergencycashpot was acknowledged in its statement
to Companies House, Scotrail raised further fears for the remainder of the franchise term, stating that expected cashflows have been “significantly impacted” as a result of the Covid-19 pandemic.
The firm said: “In response to the pandemic an emergency measures agreement was entered into with the Scottish Government, and while this insulates the company as as far as reasonable from the severe financial impacts of the pandemic, the expected cash flows across the remainder of the
franchise term have been significantly impacted.
“As a result of government intervention telling people not to travel, there was a significant reduction in passengers travelling with Abellio Scotrail - up to 95% reduction on the prior year."
The Scottish Government is to take over the running of Scotrail in March 2022, Transport Secretary Michael Matheson announced to MSPS last month.
It follows a previous decision to terminate Abellio’s ten-year
franchise as Scotland’s main train operator three years earlier than planned.
Mr Matheson said Scotrail would be run from then on by an arm’s length company owned and controlled by the Scottish Government, through an “operator of last resort”.
The news of Abellio Scotrail’s pre-tax losses comes as the company faces continuous threats of strike action over pay.