Labour has called for an investigation into an alleged conflict of interest in the award of the troubled Govia Thameslink Railway (GTR) franchise, which runs Southern services.
The Guardian reported that Department for Transport’s (DfT) managing director of passenger services, Peter Wilkinson, awarded the franchise while owning a large share in a consultancy that had been advising GTR.
Labour’s shadow transport secretary Andy McDonald, said: ‘These revelations expose the murky world of rail franchising. It is clear that the relationship between the Department for Transport, private companies who profit from our railways, and lobbying and consultancy firms is uncomfortably close.
‘For complete transparency it is essential that the secretary of state refers these allegations to the head of the civil service so they can be investigated. Without a full and open investigation that addresses these alleged conflicts of interest in the awarding of the GTR franchise and other franchises suspicions will remain about how these rail contracts are awarded.'
He added: ‘Passengers, taxpayers and stakeholders need answers if they are to have any confidence in our railways and how they are being run.’
Labour's Andy McDonald
According to the Guardian, the DfT said Wilkinson was recruited in 2013 after an open and fair competition to start work at short notice , with the aim of kickstarting a faltering franchising programme.
Concerns have repeatedly been raised over the DfT’s capabilities in respect of franchising since the collapse of the Intercity West Coast competition in 2012.
In April 2014, just days before the GTR contract was awarded, the department released an improvement plan conceding an 'urgent need' to increase its commercial skills.
Last February the Commons Public Accounts Committee said the DfT had taken steps to improve its franchise letting capability but said its capability to manage franchise contracts ‘has not noticeably improved’.
Mr Wilkinson has also been the subject of controversy for reported comments last year suggesting that he was looking for a confrontation with the unions and that those who resisted his planes could 'get the hell out of my industry'.
Under the GTR franchise the DfT pays the company to run services and recoups all revenue, meaning that cost of the compensation for poor performances and the industrial action over the last year has come out of the public purse rather than GTR profits.
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