South Western Railway 'not sustainable' and could come into public sector, Grant Shapps says
The operator could be put in public hands after losing 拢139m in the year to March, partly due to strikes and operational failures.
Wednesday 22 January 2020 15:10, UK
South Western Railway's (SWR) finances indicate it is "not sustainable in the long term", Transport Secretary Grant Shapps has said.
The operator's financial performance has been "significantly below expectation" since the franchise began in August 2017, he said, blaming poor punctuality and reliability combined with slower revenue growth.
Whilst warning that SWR, which made a pre-tax loss of £139m in the year to March 2019, has "not yet failed to meet their financial commitments", Mr Shapps said his department "must prepare suitable contingency measures".
That could mean issuing a new short-term contract to SWR's owners - FirstGroup and MTR - or transferring the operation of trains to public sector body the Operator of Last Resort.
Many will see that as a form of nationalisation, part of the Labour Party's manifesto at last month's election.
In a written statement to MPs, Mr Shapps said: "South Western Railway's (SWR's) recent financial statements have indicated that the franchise is not sustainable in the long term.
"Poor operational performance, combined with slower revenue growth, has led to the financial performance of SWR to be significantly below expectation since the franchise commenced in August 2017."
Mr Shapps stressed that there will be no impact on SWR services or staff.
Industry figures show that, between 8 December and 4 January, SWR services were, on average, 7% less likely to stop at stations within one minute of the timetable than Britain's other operators.
The national average was 62%, but SWR managed it only 55% of the time.
Operating failures have been exacerbated by an ongoing strike by members of the Rail, Maritime and Transport (RMT) union in a dispute over guards on trains.
SWR passengers have faced travel misery for more than two years as a series of walkouts have hit services.
The latest strikes lasted throughout December and into New Year's Day, leading to cancellations and delays.
The RMT has recently launched a fresh ballot of its members on continuing with industrial action.
Earlier this month, Mr Shapps announced another struggling operator, Northern Rail, could collapse within months with a decision on its future to be made by the end of January.