Rail franchises operators & contracts

04.12.18

May timetable crisis: GTR hit with government profit sanctions and told to spend £15m on improvements

Govia Thameslink Railway (GTR) has been told that it must contribute £15m towards service improvements for passengers as the government announced that the TOC will be hit with sanctions, capping its profits for the remainder of its franchise.

The DfT explained that it was “holding GTR to account” for its role in the “unacceptable performance” which followed the roll-out of the new May timetable by ensuring the operator will make no profit for this financial year, with a cap on the amount of revenue it can rake in until September 2021, when its franchise contract expires.

GTR will have to contribute £15m towards “tangible improvements for passengers” in addition to the £15m the operator has already contributed towards compensation claims.

Today, a scathing report from the Transport Select Committee described the chaos resulting from the timetable change as “potentially dangerous disruption” and argued that Chris Grayling should have taken a “more proactive approach” and had unreasonably absolved himself of responsibility.

Its MPs found that nearly half of all passenger services were disrupted, and stated that Network Rail, the DfT and the train operators such as GTR all shared responsibility. They pointed out that the main cause behind this was the “astonishing complexity” of a fragmented railway, which operators failed to recognise.

The chaos meant GTR fail to run 12% of its planned services in the weeks following 20 May.

But instead of terminating the franchise contract earlier, which the DfT claimed would cause further and undue disruption, the department instead opted for sanctions.

The Go-Ahead Group has agreed to introduce a profit-sharing mechanism with the DfT for the remainder of its GTR franchise, which means its margins are now expected to be between 0.75% to 1%, down from 0.75% to 1.5%.

The chief executive of Go-Ahead, David Brown, said: “We recognise that the industry-wide failures in delivering the May timetable created huge difficulties for our customers, and we are sorry for the poor service they received.

“This agreement will deliver additional benefits to passengers to be agreed in consultation with our customers.”

The announcement comes as the TOC prepares to introduce fresh timetable changes this weekend, with more than 190 additional services planned.

The government said it will continue to monitor GTR’s performance closely, particularly during these December timetable changes, and stressed that today’s measures don’t make the operator immune from further sanctions in the event of more performance failures.

Image credit -  Dominic Lipinski/PA Wire/PA Images

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