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Southern could need taxpayer support

Go-Ahead says passenger growth on its Southern franchise has been weak compared to its forecasts when it made its bid in 2009, and that it could need to claim revenue support from September 2013.

Revenues at the end of the period were 2% weaker than forecast in 2009, while passenger growth, at 1.2%, was half the previous year’s rate, while the premium it pays the Government to run the franchise almost doubled to £107m.

Go-Ahead posted a 3.5% fall in profits yesterday, but Go-Ahead chief executive David Brown said its rail division is confident of winning more franchises over the next four years, with 12 up for grabs.

Brown said the “jury is out” on whether Southern would need revenue support, saying: “It’s quite a tough job that [Southern] have got to do but they are focused on trying to grow the top line still and get back onto that trajectory.”

Growth forecasts are a big issue in the industry at the moment, due to the ongoing controversy over the West Coast Main Line franchise win by FirstGroup over Virgin.

Bob Crow, general secretary of the RMT union, said: “This is yet another example of the one-way ticket to the bank for the private rail operators. If they can’t extract a fat profit they can fall back on the corporate welfare of revenue support.”

Tell us what you think – have your say below or email [email protected]


M Cunningham   07/09/2012 at 13:13

Be quiet Mr Crow your the epitome of money for nothing whilst safeguarded

Paddy   07/09/2012 at 22:36

Why don't we just nationalise the Railways again? Put in a reasonble fair control and get used to the idea that Tax money will always be needed to support it. Wether it is dressed up as loans or subsidies it still keeps happening and the Railway is to important a part of our National infrastructure to be allowed to fail.

Andrew Oxon   11/09/2012 at 11:00

This shows the nonsense of the franchise system. Rail transport is an essential part of modern society, so the franchisee cannot be allowed to go bust.

RDB BSSL   21/06/2016 at 14:08

I have experienced huge delays with connecting trains, having to go via somewhere else just so that I can arrive at my destination. I have wasted loads of time trying to reach appointments on time. Who pays for my time? If the government were to take over the operations of Network Rail and all the various TOC's having the government and the only shareholder, movement between operators could be more flexible and train crews could be better managed. The money could then be recycled rather than being absorbed by greedy shareholders in those companies. Fares are much too high relative to the level of service we receive.

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