Awards, contracts & appointments

08.01.20

South Western Railway franchise uncertain after £137m loss

Rail franchise, South Western Railway (SWR), could face nationalisation following evidence of a £137m loss in the year to March 2019.

Account filings to Companies House, published yesterday (Jan 7), revealed “significant doubt” on the company’s ability to continue operating through 2020.

South Western Railway, a joint venture between FirstGroup and Hong Kong based MTR, operates routes connecting London Waterloo with Woking, Guildford, Reading, Bristol, Exeter, Southampton, Portsmouth, Bournemouth and Weymouth.

The end of 2019 saw the deadlock between the Rail, Maritime and Transport (RMT) union and the operators come to a head with 27 days of strike action, of which the consequential costs are still unknown.

RMT has demanded an “urgent” public sector takeover of SWR as accounts show the franchise is on its way to going bust.

RMT General Secretary Mick Cash said:

“Rather than allowing South Western Railway to collapse into chaos RMT is demanding that the existing operator is stripped of the franchise with the public sector taking over as soon as possible. The alternative is Britain's biggest rail franchise crashing into the buffers with dire consequences for passengers and staff alike.”

It comes days after the Transport Secretary announced that Northern Rail would be stripped of the franchise following “unacceptable” performance.

Monday (Jan 6) saw the appointment of a new managing director for SWR, Mark Hopwood, who claims to be “determined to make 2020 a better year for SWR passengers and bring a wealth of knowledge and experience to the business”

Potential options for the future include a short-term management contract from SWR to continue operating the service, or they could be stripped of the franchise within the next 12 months followed by a state take over.

A spokesman for SWR said its "recent performance has been affected by issues including infrastructure reliability, timetabling delays and industrial action".

Adding: "We continue to be in ongoing and constructive discussions with the DfT regarding potential commercial and contractual remedies for the franchise and what happens next, in order to ensure we reach the right outcome for the Government, our shareholders and our customers."

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