Ministers have awarded Govia Thameslink Railway (GTR) a new contract to continue operating the UK’s largest railway network, despite having just fined another subsidiary of the parent company a £23.5m over a deception.
The new National Rail Contract (NRC) to run the huge Thameslink, Southern and Great Northern franchise commences on 1 April and will run until at least 1 April 2025, with up to a further three years at the transport secretary’s discretion.
A Thameslink Train Source: GTR
Govia, which is is 65% owned by Go-Ahead and 35% by Keolis, has operated the contract under the GTR brand since it was created in 2014. Go-Ahead described the NRC, like the Emergency Recovery Measures Agreement contract it replaces, as ‘a management contract which has extremely limited exposure to changes in passenger demand and no substantial cost risk to GTR’.
Last week the Department for Transport (DfT) announced that a £23.5m penalty notice had been issued to LSER, which operated the SouthEastern franchise and is also owned by Govia, following ‘a serious breach of the company’s franchise agreement’.
In September 2021, the DfT announced that the LSER franchise would not be renewed with LSER. That announcement came after evidence emerged that, LSER had ‘deliberately concealed’ over £25m of historic taxpayer funding relating to HS1, which should have been returned to the taxpayer.
Despite this, rail minister Wendy Morton said ministers were ‘proud to partner with GTR’.
She said: “As the UK’s largest rail operator, I know GTR will play a key role helping the Government continue delivering our Plan for Rail and revolutionise the lives of passengers.
Mick Lynch, general secretary of the RMT union, said: 'What does a company have to do to not get a contract on Grant Shapps’s Great British Railways? The transport secretary has stripped Go-Ahead Group of a contract, made them repay money they owe, fined them and then granted them another one.'
Govia said that GTR will earn a fixed management fee of £8.8m per annum (equivalent to a margin of 0.5% of GTR’s cost base) to deliver the contract, with an additional performance fee of up to £22.9m per annum (equivalent to an additional 1.35% margin).
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