ABERDEEN-based FirstGroup has secured an agreement with the Department for Transport to operate Great Western Railway services for a further three years.
The new contract runs from April 1, when the agreement under which the bus and rail group currently operates GWR ends, until March 31, 2023, with a possible extension of up to one further year at the DfT’s discretion.
Secretary of State for Transport Grant Shapps last week announced the UK Government was providing train operators on franchises let by the DfT with the opportunity to transition temporarily on to emergency measures agreements, amid the Covid-19 coronavirus crisis. He noted these agreements suspend the normal financial mechanisms of franchise agreements, transferring all revenue and cost risk to the Government, with operators continuing to run day-to-day services for a “small, pre-determined management fee”.
GWR takes in large parts of southern England, including services to and from London Paddington, and serves South Wales, the West Country, and the Cotswolds.
FirstGroup said the GWR extension “ensures continuity of operation and will run concurrently with the DfT’s...emergency measures agreement for at least the first six months”. It cited “continuity for customers, employees and other stakeholders beyond the period of emergency measures currently proposed, as well as an appropriate balance of risk and reward between FirstGroup and the Government, supported by a contractual forecast revenue mechanism which eliminates the majority of the revenue risk”.
FirstGroup chief executive Matthew Gregory said yesterday: “Whilst the immediate focus of GWR is to ensure that key workers, vital to the country’s response to coronavirus, can get to where they need to go, continuity of rail services will also be critical to a restoration of normal life when the present uncertain and difficult situation is overcome.”
Shares in FirstGroup rose 0.9p to 48.4p.
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