South Western Railway finances indicate the franchise is “not sustainable in the long term”, according to Transport Secretary Grant Shapps.
Mr Shapps MP said the operator’s performances have been “significantly below expectation” since the franchise started in August 2017, claiming poor punctuality and operational performances combined with slower revenue growth are to blame.
South Western Railway have not yet failed to meet financial commitments but the Department for Transport will “ensure that South Western Railway are held to their financial obligations under the current franchise”.
Mr Shapps has also said his department “must prepare suitable contingency measures”.
This could mean offering a new short-term contract to South Western Railway’s owners – FirstGroup plc and MTR – or transferring the operation to the Operator of Last Resort.
Mr Shapps said in a statement: “As a precautionary measure, my department must prepare suitable contingency measures, under the Railways Act 1993.
“Such options include a new short-term contract with South Western Railway with tightly defined performance requirements; or transferring the operation to the Operator of Last Resort (OLR), a public sector operator wholly owned by the department.
“My department has issued a request for proposal to the South Western Railway franchise owners (FirstGroup plc and MTR) and to the OLR, and will evaluate the responses to determine how best to secure the continuation of passenger services on this part of the network.”
Mr Shapps stressed that there will be no impact on the railway’s day-to-day operations, staff or services and that business will run as usual.
South Western Railway up against it
Industry figures show that between 8 December and 4 January, South Western Railway services were seven percent less likely to stop at stations within one minute of the timetable.
South Western Railway are facing increasing pressure after months of ongoing strike action by members of the Rail, Maritime and Transport union in a dispute over the role of guards on trains.
The latest strikes disrupted most of December and into New Years Day, leading to cancellations and delays.
Earlier this month, Mr Shapps announced Northern Rail could collapse within months with a decision on its future to be made by the end of January.
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