South Western Railway routes may return to state ownership as minister says franchise is ‘not sustainable’

The franchise began in 2017
PA
Nicolas Cecil|Tim Baker22 January 2020

Ministers have paved the way to potentially taking one of London’s busiest commuter services back into public ownership.

Transport Secretary Grant Shapps declared that South Western Railway’s franchise was no longer seen as “sustainable in the long term”.

The Department for Transport is now preparing contingency plans which could see a new short-term contract with SWR’s owners — or transferring the operations back into state control.

No decision has yet been taken on which option to favour but the move highlights Mr Shapps’ determination to crack down on dismal services being delivered for rail passengers.

Transport Secretary Grant Shapps said the franchise is "not sustainable in the long term"
Getty Images

Just 55 per cent of scheduled train stops were made within one minute of the timetable by SWR between December 8 and January 4, according to industry figures, compared with the average across Britain of 62 per cent.

Commuters on SWR services, which run in south-west London, the wider South East and some to the West Country, have also suffered frequent cancellations and trains skipping stations to catch up on journeys.

In a statement to Parliament, the Cabinet minister said: “South Western Railway’s recent financial statements have indicated that the franchise is not sustainable in the long term.”

He added that “poor operational performance” and “slower revenue growth” led to a financial performance “significantly below expectation” since the franchise began in 2017.

SWR was still meeting its financial commitments under the franchise.

“However, as a precautionary measure, my department must prepare suitable contingency measures, under the Railways Act 1993,” Mr Shapps said.

“Such options include a new short-term contract with SWR, with tightly defined performance requirements; or transferring the operation to the Operator of Last Resort, a public sector operator wholly owned by the Department.”

The DfT has asked for proposals from SWR franchise owners, FirstGroup plc and MTR, and from the Operator of Last Resort. Any decision is not expected to be taken on the future of the franchise for at least several months.

Ministers are proposing a major shake-up of the railway network to stop so many areas being blighted by a poor service, with Northern Rail also facing the possibility of renationalisation, as happened on the East Coast mainline which is now run by LNER.

Mr Shapps is due to publish the Williams review to bring in significant reforms to the rail system.

An SWR spokesman said the company is “working hard to improve our performance” with the introduction of an “improvement centre” and £895 million trains which will be in use this year.

A FirstGroup/MTR spokeswoman said: “We continue to be in ongoing and constructive discussions with the DfT regarding potential commercial and contractual remedies for the franchise and what happens next.”

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