The Department for Transport's (DfT) income from passenger rail fell by £511m in 2017-18, a drop of 40% on the previous year, with total income from train operating companies (TOCs) falling by 21%.
During this time ticket revenue increased by 2.3%, despite a 1.4% fall in passenger numbers - the largest decrease recorded since 1993-94.
When questioned on the fall by the Commons Transport Select, the DfT put it down to three main factors:
- Franchises recording a significant planned increase in their cost bases, particularly Great Western and GTR, where major new rolling stock was introduced at higher lease costs. Dual use systems where old fleets and new are being leased at the same time appears to have added the costs. These planned extra costs were reflected in the franchise contracts and so lower premium payments were expected.
- Compensation paid to franchisees as a result of delays in Network Rail's infrastructure upgrade projects including the Great Western Electrification Programme.
- The increase in ticket reveune failing to keep pace with RPI inflation, which rose by 3.3% during the year
In total, the DfT saw a 21% reduction in income from TOCs last year, down from £1.9bn to £1.5bn.
The failures of the Great Western Electrification programme also extend to delays in building a test track for new trains that would run on the electrified line.
This result was what the committee described as an annual £42m loss 'for trains that are not ready or cannot be used', as the DfT was liable for £42m in compensation payments to Agility Trains - led by Hitachi - for delays to acceptance of the units.
The department also confirmed Network Rail lost £63.7m in annual profit (2017-2018) brought in from commercial estate property that it sold off for £1.46bn as part of debt reduction plans.
Despite this, Network Rail's debt jumped from £46.3bn in 2016/2017 to £51.2bn last year.
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