07.09.12
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.”
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