Go-Ahead's GTR to fund £13.4m improvements after Southern strike chaos
Rail franchise holder Govia Thameslink Railway will fund a raft of performance and passenger improvements worth £13.4m, it announced on Thursday, as a direct implication of the ongoing industrial action on its Southern routes.
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The operator, 65%-owned by FTSE 250 firm Go-Ahead with the remaining 35% held by French passenger transport group Keolis, operates the Thameslink, Great Northern, Southern and Gatwick Express rail routes in and around London and the South East.
Govia also runs the Southeastern and London Midland services, although those are operationally separate from its Govia Thameslink Railway ‘superfranchise’.
In an announcement, the company said it had reached an agreement with the Department for Transport over the “contractual variations and claims” on the franchise, relating to the impact of industrial action and train performance over the last 18 months.
The company said the £13.4m outcome was in line with the financial judgements made by management, and as a result its expectations for the year to 1 July remained unchanged.
“Go-Ahead stated at its half year results in February that the range of uncertainty around profitability of the group's rail division for the year to 1 July 2017 was £15m,” its board explained.
“This range related to the outcome of discussions with the DfT regarding the impact of industrial action on train performance, and other contractual variations.”
Go-Ahead said the contractual discussions relating to the impact of industrial action on train performance had now been resolved, with the outcome “very close” to management's central judgements.
“The remaining range of uncertainty is £5m, reflecting a number of other ongoing contractual variations including rolling stock cascades and timetable specifications, which remain under discussion with the DfT.”
Go-Ahead said the agreement resolved financial uncertainty relating to past industrial action, and allowed GTR to focus on improving services for Southern customers and delivering the “significant” passenger benefits associated with the Thameslink Programme.
The industrial action had been ongoing since the beginning of 2016 over a number of issues raised by staff on the Southern routes - primarily the company’s plans to give control of train doors to drivers, and pivot guards to a more customer service-focussed role.
But the arrangement wasn't welcomed by everybody, with the Rail, Maritime and Transport (RMT) union denouncing the decision, calling it the "latest whitewash" of the "Southern rail shambles".
Its general secretary, Mick Cash, said the decision was "hardly a surprise when they’ve been up to their necks in this fiasco right from day one.#
"This pathetic response to the abject failure by GTR to deliver on their contract doesn’t even stack up to a slap on the wrist."
Cash said it was a case of the government and the rail industry investigating themselves, while the services they are responsible for became a "global laughing stock".