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The Department for Transport has extended Govia Thameslink Railway’s Emergency Recovery Measures Agreement from September 20 2021 until March 31 2022 on the existing terms, and laid the ground for a directly-awarded contract which could run up to a further six years.
Govia Thameslink Railway is owned by the Govia joint venture of Go-Ahead (65%) and Keolis (35%). It operates Thameslink, Southern & Great Northern passenger services in southern England under a DfT contract which first began in September 2014.
Because of uncertainty around the impact of the Thameslink Programme of infrastructure works the franchise was structured as a management contract, with DfT taking the revenue and paying the operator’s costs plus a margin. The contract had been due to run for seven years, but the collapse in ridership during the coronavirus pandemic led to the introduction of Emergency Recovery Measures Agreements across the industry during 2020.
The operator said the TSGN management contract generates a margin of up to 1·5% with no financial exposure to passenger volumes.
Welcoming the announcement of the extension on June 17, Keolis UK Chief Executive Alistair Gordon said ‘the excellent work and focus of GTR in delivering continuous improvement across its services has been recognised’.
Go-Ahead CEO David Brown said ‘more people are using our rail services now than at any time during the pandemic, and we look forward to welcoming more customers back in the months ahead.’
Go-Ahead said around 90% of its total group revenues were now generated through contracts where there was no direct revenue risk from changes in passenger demand.
DfT has also published an updated prior information notice which would enable it to directly award a contract for the operation of TSGN services for up to 72 months from April 1 2022.
This is likely to include a core period of at least two years, with optional additional periods at the discretion of the contracting authority. However, DfT reserves the right not to proceed with the direct award as envisaged or to use an alternative method to procure an operator.
The services would be similar to those currently operated by GTR.
This article first appeared on www.railwaygazette.com
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