Southern/GTR debacle to cost Government £38m

 

The ongoing Southern/Govia Thameslink Railways (GTR) debacle could cost the taxpayer £38m this financial year, enough to repair more than 700,000 potholes.

The cash includes £4.7m paid in compensation to passengers for poor services, through the Delay Repay scheme, which the Government also has to pay out of its own pocket under the franchise deal with GTR.

”Local
Rail minister Paul Maynard

The news comes as ministers stall on a decision over the future of the franchise, which could see the company stripped of its contract in the light of fierce criticism from both passengers and MPs. 

In a letter to Louise Ellman MP, chair of the Commons Transport Select Committee, rail minister Paul Maynard set out ‘the impact of poor performance and the revised timetable on farebox and total revenue’ on the GTR franchise, which includes Southern Rail.

Mr Maynard wrote: ‘Due to unofficial industrial action on GTR, it is difficult to accurately assess the full impact of ongoing poor performance and the revised timetable on revenue. However, GTR has estimated that the likely combined impact since the start of Rail Period 1 on 1 April 2016, will be in the region of £38m for this financial year.’

GTR confirmed that this figure represented a projection up to the end of the financial year, suggesting that it expects operational difficulties and industrial action to continue.

The figure represents a loss to the Department for Transport (DfT) as the Government bears the revenue risk under the unique GTR management contract, including the compensation payments.

Mr Maynard said GTR had advised the DfT that 'official industrial action called by RMT has resulted in an £8.4m loss of farebox revenue up to the end of Rail Period 7 on 15 October 2016'.

With the company in breach of its obligations on reliability, its retention of the franchise appears to depend on its claim of force majeure (exceptional circumstances), which includes arguing that high sickness levels by RMT conductors represent ‘unofficial industrial action’, in the long-running dispute over the company’s attempt to change their role. 

Last month the Transport Committee said that if the DfT finds GTR in default, it ‘must take the opportunity to restructure or terminate the agreement and deliver services in a more effective way for passengers’.

In an earlier letter to Ms Ellman, Mr Maynard stated that the process of assessing the claim was ‘expected to be completed by mid-November’.  

However, a  DfT spokesman told Transport Network on Monday: ‘The DfT is currently considering GTR’s claim that poor performance has been due to factors outside of the operator's control. This involves an analysis of a large amount of complex data. We will respond in due course.’

 

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