North East transport giants the Go-Ahead Group and First Group have both announced the renewal of rail contracts in the 海角视频 - with some changes to reflect the current plummeting passenger numbers.
Newcastle based Go-ahead said the Department for Transport (DfT) has awarded a Direct Award Contract to Govia to continue operating the Southeastern franchise.
The new deal starts on April 1 2020 and will run until October 16 2021, with the option to extend at the DfT's discretion until March 31 2022.
Under its existing contractual terms, Southeastern's revenue is largely generated by passenger fares but the new arrangement is a management contract, reflecting the DfT's response to the COVID-19 pandemic, removing exposure to the steep fall in passenger demand and costs.
The management fee will be set at a maximum of 2% of Southeastern's cost base before the pandemic began.
Around 90% of total Group revenues are now derived from contracted markets where there is no direct revenue risk from changes in underlying travel demand.
Go-Ahead said that Southeastern will continue its immediate focus on providing services for key workers during the national crisis and that further ahead, during the course of the contract term Southeastern will deliver customer experience improvements including options to boost capacity as additional rolling stock becomes available, as well as its punctuality strategy for the Southeastern network beyond 2022.
Govia - the joint venture which comprises Go-Ahead 65% and Keolis 35% - has operated Southeastern since 2006 and that punctuality on Southeastern has increased by nearly 10% in the last two year.
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David Brown, Go-Ahead CEO, said: "This new contract provides continuity and stability during a challenging time. The immediate priority remains the health and wellbeing of colleagues and customers, and to support society by providing an essential service for key workers."
Meanwhile, FirstGroup will continue operating Great Western Railway until March 2023, with the potential to extend for another year.
It said revenue will be based on a forecast mechanism, which “eliminates the majority of the revenue risk”. Following the announcement of the Emergency Measures Agreement, he Government will take revenue and cost risk with franchise operators receiving a fixed management fee, with the potential for a small performance-based fee.
The Great Western service will see a range of improvements including extra services, flexible ticket products and new fleets.
Matthew Gregory, FirstGroup Chief Executive, said: “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. In the longer term this new agreement will mean that customers can return to rail as their preferred choice of travel; with more seats, more services, better stations and more flexible ticketing to help reconnect the people and communities we serve.
“When the present emergency measures agreed with Government come to an end, today’s agreement will ensure that GWR will continue to deliver sustainable benefits for customers and an appropriate balance of risk and reward for our shareholders and the Government. We are proud of GWR’s achievements over the last few years, working with industry partners to transform the experience for passengers with new, faster and more environmentally friendly trains and a timetable offering record fast journey times to the major towns and cities on the route.”
“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. In the longer term this new agreement will mean that customers can return to rail as their preferred choice of travel; with more seats, more services, better stations and more flexible ticketing to help reconnect the people and communities we serve.
“When the present emergency measures agreed with Government come to an end, today’s agreement will ensure that GWR will continue to deliver sustainable benefits for customers and an appropriate balance of risk and reward for our shareholders and the Government. We are proud of GWR’s achievements over the last few years, working with industry partners to transform the experience for passengers with new, faster and more environmentally friendly trains and a timetable offering record fast journey times to the major towns and cities on the route.”