DUTCH state owned railway company Abellio has said it remains "proud" of its role after being axed from their involvement with Scotland's railways which are now to become nationalised.

The ScotRail train franchise will come under direct control of the Scottish Government from 2022.

Services will be run by the Government as an “operator of last resort” when the current contract with Abellio ends next March. Mr Matheson explained that he had considered sticking with Abellio after March, 2022, but decided it was not in the country's best interest.

He told the Scottish Parliament he had ruled out extending the existing contract with the Dutch rail operator because “the current franchising system is no longer fit for purpose”.

Mr Matheson could not say how long the 'operator of last resort" arrangements would be in place for, adding that it was something that will be considered further as the "shape and pace" of rail reform becomes clearer.

In a statement, Abellio ScotRail said: “We want to reassure you that we’ll keep operating a reliable service to support the vaccine rollout and the opening up of the economy over the coming months, as preparations are made for the introduction of the changes the Scottish Government have announced.

“We’ll work closely with @transcotland and @NetworkRailScot to ensure a smooth transition to the new operator, to deliver stability for customers and railway staff.

“Since Abellio was awarded the franchise in 2015, we’ve invested £475 million in new and upgraded trains and transformed Scotland’s railway.

“Recently, we’ve also been delivering sustained high punctuality, in particular during the pandemic.

READ MORE: ScotRail to become state owned from March 2022

“Our customer satisfaction scores are a testament to the hard work of our 5,200 highly-skilled staff.

“Throughout the pandemic, we’ve provided a vital service working closely with partners across the railway and in government.

“We’re proud of our role in such challenging times.”

Dutch firm Abellio

Reacting to the announcement, Kevin Lindsay, ASLEF’s organiser in Scotland, said: ‘We welcome the beginning of the end of the failed franchise system here in Scotland.

“However, never again should people’s railway ever be in the hands of the privateers.

“This move starts the end of franchising and the end of a failed Tory experiment.

“It’s now for all us in the railway to build a railway that’s accessible, affordable, and safe for the people of Scotland.”

The RMT general secretary Mick Cash, called for the move to happen in September, rather than March, and added: “We have long campaigned for the Scottish Government to utilise its existing powers and take Scotland’s rail passenger services into public ownership and today’s announcement represents a clear victory for this campaign.

“Public ownership of ScotRail will deliver significant benefits for Scotland’s rail workers, passengers and taxpayers and help enable the creation of an affordable, accessible and sustainable rail network that contributes to Scotland’s decarbonisation targets.

“In light of today’s announcement, RMT will be seeking urgent discussions with the Scottish Government to ensure that all ScotRail workers’ jobs, pay and conditions are protected throughout this process and once they transfer to the new operator.”

Mr Matheson said ScotRail services will be provided by an “arm’s length company” that will be owned and controlled by the Scottish Government.

“With the current ScotRail franchise expected to end in March 2022, we need to take decisions about successor arrangements within the current legislative framework,” Mr Matheson said.

He added: “I have decided that it would not be appropriate to award a franchise agreement to any party at this time, either through a competition or a direct award.

“That is why I have confirmed that, from the expiry of the current franchise, ScotRail services will be provided in public hands through a company wholly owned and controlled by the Scottish Government.

“This is in line with our operator of last resort duty.

“ScotRail staff will transfer to the new Scottish Government-owned entity, with their terms and conditions protected.

“This approach will provide a stable platform for ScotRail services and certainty for passengers and staff.”

Asked about the financial implications of the decision, Mr Matheson said: “In terms of the cost of the new body, that’s a cost which will be made internally within the existing rail budget.

“It will not be an additional cost over and above what we are already investing in rail.”

He also explained that the Government is working on further Emergency Measures Agreements (EMAs) for ScotRail and Caledonian Sleeper franchises from April to September because of the financial impact of the pandemic, with support estimated to cost £173.1 million.