A PUBLIC sector body will be ready to take over Scotland's rail franchise if the current operators are axed early due to growing concerns over reliability, ministers have pledged.

Work is underway to ensure a non-profit organisation is in position to bid for the rail contract whenever it next comes up for renewal, the Scottish Government has confirmed.

Abellio, the Dutch operators of the current ScotRail franchise, has a contract until 2025. However, there is a break-point at the half-way point of the deal in 2020 and the Scottish Government has faced calls to consider tearing it up even earlier, a move it would be able to consider under the terms of the contract if performance falls further.

Read more: Our broken rail system: now Transport Scotland joins Scotrail in the dock

It is understood that Government officials have begun drawing up plans that will ensure a public sector operator is strong enough to bid for the contract with a formal announcement potentially coming next year.

A Scottish Government spokesman said: "Using new powers awarded in March of this year, Transport Scotland officials have started the work necessary to fulfil the commitment to ensure that a public sector body is in a position to bid for the next franchise. We will ensure that a public sector bidder is ready should either we or Abellio ScotRail take steps to invoke the break-point in the current contract."

Previously, public sector bodies or publicly-owned companies had been banned from bidding for franchised rail contracts under UK Government legislation. While the Scottish Government remains unable to order a full renationalisation of the railways, the power to allow public bodies to bid for the ScotRail franchise has been transferred to Holyrood as part of the package of further powers promised ahead of the 2014 independence referendum.

Read more: Our broken rail system: now Transport Scotland joins Scotrail in the dock

Scottish Labour has said that the previous award of the contract could have been frozen to allow for a public provider to enter the running. A spokesman said: "The SNP Government had the opportunity to deliver a not for profit ScotRail in 2014, but ignored calls from Labour and the transport unions to freeze the tendering process until the powers were devolved."

ScotRail has provided an improvement plan to ministers, amid growing criticism of the country's railways due to delays to services and cancellations. Abellio has reported making a £1 million a month profit since taking over the contract last year, with almost 20,000 recently signing a contract calling for it to be stripped of the franchise.

Recent statistics showed that trains are now more more likely to be late than on time on a third of Scotland's routes, while rush hour fares have soared by three times more than average wage rises since the turn of the decade.

It is understood that ScotRail will this week issue results for the latest four-week period which shows the operator narrowly exceeding targets for punctuality and reliability.

Read more: Our broken rail system: now Transport Scotland joins Scotrail in the dock

Responding to recent criticism, a Scotrail Alliance spokeswoman said: "We have a Performance Improvement Plan in place and are working hard to get our service back to the levels the rail travelling public, we and Transport Scotland expect."

An Abellio spokesman said: "In Abellio we have long understood that the Scottish Government had every intention of seeking a public sector bidder for the next ScotRail franchise.

"We remain fully focussed in getting on with the job of delivering a national railway fit for Scotland and our customers."