The
National
Rail
Contract

possessed
by
South
Western
Railway
has
been
extended
by
two
years.

SWR
is
owned
by
FirstGroup
and
MTR,
which
have
70
per
cent
and
30
per
cent
respectively.
It
began
as
a
franchise,
replacing
Stagecoach’s
South
West
Trains,
on
20
August
2017,
and
would
have
run
for
seven
years
to
August
2024,
with
an
option
for
a
one-year
extension
at
the
discretion
of
the
Department
for
Transport.

However,
the
franchise
began
to
run
into
trouble
in
2018,
when
the
accounts
recorded
a
loss
of
almost
£137
million
in
the
year
to
March
2019.
The
directors
also
warned
that
cash
support
of
£146
million
from
FirstGroup
and
MTR
would
probably
run
out.

In
January
2020,
transport
secretary
Grant
Shapps
admitted
that
the
franchise
was
‘no
longer
sustainable’,
but
the
Covid-19
pandemic
caused
franchises
to
be
suspended
in
March.
After
a
period
of
Emergency
Measures,
the
DfT
granted
a
new
SWR
National
Rail
Contract
to
start
from
March
2021
and
run
until
May
this
year.
This
will
now
continue
until
May
2025.

The
terms
of
the
contract
mean
that
revenue
is
collected
and
costs
are
paid
by
the
DfT,
which
gives
the
operator
a
performance
fee,
and
FirstGroup
said
that
‘current
contractual
arrangements’
will
continue.

First’s
CEO
Graham
Sutherland
said:
‘We
welcome
the
contract
extension
for
South
Western
Railway,
which
enables
us
to
build
on
the
achievements
of
the
first
two
years
of
the
contract
and
continue
improving
the
customer
offering.
We
are
committed
to
working
closely
with
government
and
our
partners
to
deliver
a
successful
railway
network
that
provides
vital
connections
for
customers
and
communities
along
the
SWR
route.’

The
decision
follows
transport
secretary
Mark
Harper’s
announcement
three
days
ago
that
the
new
‘guiding
mind’
to
be
known
as
Great
British
Railways
is
to
go
ahead,
and
that
new-style
Passenger
Service
Contracts
managed
by
GBR
will
‘balance
the
right
performance
incentives
with
simple,
commercially
driven
targets’. He
added
that


‘risk
will
sit
where
it
is
best
managed’.