Ministers have scrapped the competition for the South Eastern rail franchise and handed the current operator a further extension.
Govia (a Go-Ahead/Keolis joint venture) will continue to operate the route until April 2020 under the Southeastern brand but the Department for Transport (DfT) has not said what will happen next.
A DfT spokesperson said: ‘We have taken the decision to cancel the South Eastern franchise competition.
‘This follows significant concerns that continuing the competition process would lead to additional costs incurred to the taxpayer, with no certainty that this would deliver envisaged benefits for passengers in a timely fashion.
‘The Department will use this period to develop a solution that delivers the capacity and performance benefits that passengers are expecting, and ensure that the recommendations of the Williams Review can be implemented.’
Go-Ahead chief executive David Brown said the firm was disappointed that its bid is not being taken forward but will ‘engage with the DfT on next steps’.
He said: ‘A lot of hard work was put into a strong bid that would have built upon the achievements of Southeastern in recent years in improving performance and customer satisfaction, delivering more capacity and investment.'
The new franchise was originally due to begin in December 2018. In April the then transport secretary, Chris Grayling, said the existing franchise had been extended again until November, with an option to extend to April 2020.
At the same time, Stagecoach was barred from bidding for the South Eastern and other rail franchises.
Rachael Maskell MP, Labour’s shadow rail minister, said important investment decisions such as new trains are being 'kicked into the long grass'.
She said: 'Nothing has changed at the Department for Transport, and Grant Shapps is ploughing ahead with the disastrous rail policy of his predecessor Chris Grayling.
'It’s clear that the government does not believe franchising competition can deliver benefits for passengers – but they have no ideas for how to deliver better services.'
RMT union general secretary Mick Cash accused ministers of trying to run train services ‘on the hoof’.
He said: ‘The cancellation of the competition for the Southeastern franchise shows yet again that the whole privatised rail system is broken and coming apart at the seams.
‘The chaos of short-term extensions to get the Government off the hook is a measure of just how rotten their rail policies are.’