Go-Ahead's GTR awarded National Rail contract to 2025

The London-listed passenger transport operator said the new contract starts on 1 April, and would run until at least 1 April 2025, with up to a further three years at the Secretary of State's discretion.

Govia Thameslink Railway is a 65-35 joint venture between Go-Ahead and French firm Keolis, and runs services under the Thameslink, Southern, Great Northern and Gatwick Express banners.

The company said the National Rail contract, like the Emergency Recovery Measures Agreement (ERMA) contract it would replace, is a management contract with “extremely limited exposure” to changes in passenger demand, and “no substantial cost risk” to GTR.

GTR would earn a fixed management fee of £8.8m per year, equivalent to a margin of 0.5% of its cost base, with an additional performance fee of up to £22.9m per annum, equivalent to an additional 1.35% margin.

Subject to achieving performance targets set by the DfT, the maximum fee receivable by GTR would be £31.7m per annum, equivalent to a margin of around 1.85%.

The contract would also allow for individual project fees to be earned by GTR on the delivery of additional initiatives, as directed by the DfT.

“Under this new contract we will build on our achievements in enhancing performance in recent years,” said Go-Ahead chief executive officer Christian Schreyer.

“We will be working closely and collaboratively with DfT, Network Rail and other partners to run the most reliable service possible, and we will be putting passengers' interests first.”

Schreyer said a top priority was to build passenger numbers back after the Covid-19 pandemic.

“Go-Ahead will bring commercial acumen and international experience to bear in encouraging people back to the railways.”

At 0906 GMT, shares in Go-Ahead Group were up 6.59% at 792.5p.