Govia Thameslink Railway Franchise Agreement

GTR will not make a profit from the franchise this fiscal year, and future profits will be capped until September 2021, when the franchise ends, the Department of Transportation (DfT) said. The Railway, Navigation and Transport Union (RMT) called on Grayling to resign, saying the actions taken against the GTR were a “dismal insult to the thousands of passengers who have suffered daily from the misery of this basket franchise.” 2.The Department of Transport designs, leases and manages franchises that operate most rail passenger services in the United Kingdom. Since September 2014, Govia Thameslink has operated the TSGN franchise. The franchise operates services in the south-east and east of England and is the largest of the department`s 15 franchises. In 2016/2017, there were 321 million trips on TSGN services.2 11.The department structured its contract for the TSGN franchise so that Govia Thameslink would not withhold revenues from passenger fares. It accepted that Govia Thameslink may have been less incentivized than normal to avoid union action, as its revenues would not change, even if passenger incomes were declining or passenger compensation was due.27 The Department informed us that it had designed the contract in such a way as to encourage Govia Thameslink to: 28 the risk of a decline in revenues, the consequences of the risk that performance was not good enough were the responsibility of the operator2914.29.The Department informed us that govia Thameslink was in such poor shape that passenger performance was inadequate. cancel the contract in early 2017. It ultimately decided that it was right to continue to manage and implement, for passengers and taxpayers, the plan defined in the franchise agreement. The NAO found that the usual approach to determining liability for delays and cancellations was not working, as Govia Thameslink asserted much more “force majeure” rights after the start of union actions. Each of these claims had to be settled individually.

The department decided that the amount of the “force majeure” disruption meant that there were not enough legal reasons to terminate the contract.33 In a statement on Tuesday, the department said: “The termination of the franchise would result in additional and inappropriate disruption to passengers and is not an appropriate procedure.” 8.The Department informed us that the Thameslink programme “is probably the most complicated upgrade we have ever tried on the UK`s live rail network.”