Southern owner Govia could leave taxpayers shelling out ‘tens of millions’ more a year, report claims

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 10 Jan 2018) London, Uk – –

Taxpayers may be on the hook for tens of millions of pounds a year in extra payments to underperforming rail operator Govia even though older trains will now be used for longer.

The National Audit Office (NAO) said a delay to the delivery of new Class 700 trains for Govia’s Thameslink services meant the company would be unlikely to have the amount of new trains which had been planned when the contract was first struck.

It also said because the Department for Transport (DfT) had changed the timetable it wanted Govia to operate on the GTR franchise, further cash would be given to the poor performing operator.

“The impact of the changes is expected to amount to tens of millions of pounds a year,” the NAO said.

Govia said it had to “significantly alter” the makeup of its train fleet compared to what had been planned in 2015.

It said on Great Northern, it still had all of its older Class 365 trains whereas at this point in the franchise it should have released half of these.

Its 29-strong fleet of Class 387/1 trains, although more modern than some of its oldest trains, were also only meant to be run on Thameslink until the Class 700s arrived. The 387/1 trains will now all be used on Great Northern alongside Class 700s once those arrive.

The delay in introducing Class 700s has been partly due to technical issues that delayed their roll out as well as infrastructure restrictions on the network.

The NAO suggested that due to the “high level of disruption for passengers”, particularly on Southern rail which has been dogged by strikes in the past two years, the GTR franchise had been poor value.

“While industrial action has been a major contributor to disruption, on a scale which would have been difficult for the DfT to foresee, it did make decisions on this franchise, the cumulative effects of which have negatively impacted on passengers,” the NAO said.

“We cannot therefore conclude that the Department has to date achieved value for money from this franchise.”

A DfT spokesperson said it could not comment on specific figures it might pay Govia but acknowledged it would be paying the operator more money because it would be running a greater number of services. It added that more services, such as a half-hourly all-day Thameslink service to and from Maidstone East instead of the peak-only service initially planned, should lead to more revenue for the Government.

Anthony Smith, chief executive of the independent watchdog Transport Focus, said: “The report mirrors what passengers have told us through our National Rail Passenger Survey – that poor performance means they feel they aren’t getting good value for money on this service.”

Since Govia started operating the full franchise in July 2015, around 146,000 services (7.7pc of planned services) have either been cancelled or have been delayed by over 30 minutes, compared to 2.8pc on the rest of the network, the NAO said.

The GTR franchise works differently to others in the UK. The Government receives the revenue generated from ticket sales and pays Govia a fee for running the services.

Between September 2014 and August 2017, the taxpayer has received £3.6bn of fare revenue and paid Govia £2.8bn, meaning a net return of £760m in that period.

GTR, the UK’s largest rail franchise, is operated by the Govia joint venture owned by Go-Ahead and France’s Keolis. The franchise covers 19pc of all passenger rail services the DfT is responsible for.

By Bradley Gerrard