((qlmbusinessnews.com via theguardian.com – – Tue, 28th Sept 2021) London, Uk – –
Department for Transport finds rail operator did not declare more than £25m of historical taxpayer funding
The government is taking over the running of Southeastern railway services from Go-Ahead after discovering a “serious” breach of the franchise agreement.
The transport secretary, Grant Shapps, said an investigation by the Department for Transport found that since October 2014 Southeastern had not declared more than £25m of historical taxpayer funding that should have been returned, and described this as a serious breach of the franchise agreement’s “good faith” obligation.
He said the money had been recovered and further investigations were being conducted into all historical contract issues related to the franchise. After these investigations, the government will consider further options for enforcement action. It is understood the matter could be looked at by the Serious Fraud Office. Stagecoach takeover could mark end of a profitable era for bus and train tycoons.
Southeastern’s owner, Go-Ahead, said “while the contracts concerned are highly complex”, it “acknowledges that errors have been made in relation to the franchise” and that the £25m had been repaid.A
Shapps said: “There is clear, compelling and serious evidence that for years, London and South Eastern Railway Services have breached the trust that is absolutely fundamental to the success of our railways. When trust is broken, we will act decisively.”
The franchise will be run by the government’s in-house operator of last resort – railway managers who already oversee London North Eastern Railway and Northern- from 17 October.
Shapps said the decision would not affect jobs and that fares, tickets and services will remain unchanged for passengers.
Southeastern is run by Govia and operates services across south-east England, covering London, Kent, East Sussex and the High Speed 1 lines. It employs 4,000 people.
The Go-Ahead Group chairman, Clare Hollingsworth, said: “It has always been this group’s intention to provide the best possible public transport, and to work in partnership with the government and related agencies. We recognise that mistakes have been made and we sincerely apologise to the DfT. We are working constructively with the DfT towards a settlement of this matter.”
Go-Ahead said it was postponing its results for the year to 3 July, which had been scheduled for Thursday. Its chief financial officer, Elodie Brian, is to stand down with immediate effect after two years in the job and 13 years with the company.
The government’s decision leaves the group with GTR (Govia Thameslink Railway), which runs the Thameslink, Southern, Great Northern and Gatwick Express services. Both GTR and Southeastern are run by Govia, a joint venture with France’s Keolis, dominated by Go-Ahead with a 65% share.
Go-Ahead also runs trains in Germany and Norway and is the biggest operator of buses in London.
By Julia Kollewe
