TIDMGOG
RNS Number : 9854F
Go-Ahead Group PLC
25 March 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
National Rail Contract awarded for GTR
The Go-Ahead Group today announces that the Department for
Transport (DfT) has awarded a National Rail Contract (NRC) to Govia
Thameslink Railway (GTR) to continue operating the Thameslink,
Southern and Great Northern rail services, the UK's largest railway
network.
Contract highlights
The new contract commences on 1 April 2022 and will run until at
least 1 April 2025, with up to a further three years at the
Secretary of State's discretion.
The NRC, like the Emergency Recovery Measures Agreement (ERMA)
contract it will replace, is a management contract which has
extremely limited exposure to changes in passenger demand and no
substantial cost risk to GTR.
GTR will earn a fixed management fee of GBP8.8m per annum
(equivalent to a margin of 0.5% of GTR's cost base) to deliver the
contract, with an additional performance fee of up to GBP22.9m per
annum (equivalent to an additional 1.35% margin). Subject to the
achievement of performance targets set by the DfT, the maximum fee
receivable by GTR would therefore be GBP31.7m per annum (equivalent
to a margin of around 1.85%). All figures are on a pre-IFRS 16
basis.
The contract also allows for individual project fees to be
earned by GTR on the delivery of additional initiatives as directed
by the DfT.
Background
Since 2014, GTR has operated Southern, Thameslink, Great
Northern and Gatwick Express, which delivered 349 million passenger
journeys annually prior to the COVID-19 pandemic. GTR manages 235
stations in London and the south-east of England and employs 7,400
people.
The NRC serves as a bridge to the future Passenger Services
Contracts intended to be let and managed by Great British Railways
in line with the Williams-Shapps Plan for Rail, announced in May
2021.
During the NRC period, GTR will focus on encouraging more people
to return to rail following the pandemic. It will continue to
further improve the customer experience, with dedicated funds
available for localised station enhancements, for customer and
community led projects, and for projects to remove barriers for
disabled people at more of its stations. GTR will continue to
improve punctuality and reliability through close collaboration
with Network Rail.
Building on its already strong environmental credentials, GTR is
aiming to become an even greener train operator, working towards
phasing out its diesel fleet by 2035, introducing its first zero
emission ancillary vehicles in the next 12 months, and aiming to
increase recycling rates to 80 per cent over the next three years.
Expanding on its successful apprenticeship programme, GTR will
increase apprenticeship opportunities - aiming for 2.5 per cent of
its workforce to be new apprenticeship starts. Acknowledging the
value of diversity, GTR will set targets aimed to build on its
positive work to increase female and ethnic minority representation
amongst both train driver recruits and in engineering/technical
apprenticeships.
Go-Ahead's subsidiary, Govia (Go-Ahead 65%, Keolis 35%), has
operated GTR since it was created in 2014. With its industry
partners it worked to deliver the Thameslink Programme which has
transformed journeys to, through and within London. More than 1,500
new railway carriages (replacing some of the country's oldest
fleets), over 1,000 station improvement projects and industry
leading smartcards and tools, have all been delivered for
customers. Performance has improved with a steady increase in
customer satisfaction over a five year period. Last year Southern
was named Passenger Operator of the Year at the National Rail
Awards, with Great Northern as runner up. GTR's support for the
growth and wellbeing of the communities it serves has included a
successful partnership with the Prince's Trust that has enabled
rail careers for 120 young people from challenging backgrounds,
suicide prevention training for colleagues that has led to a 57%
increase in life saving interventions, and the biggest roll out of
life saving defibrillators on the UK rail network, with one
available at every station.
Wendy Morton, Minister for Rail, said:
"As the UK's largest rail operator, I know GTR will play a key
role helping the Government continue delivering our Plan for Rail
and revolutionise the lives of passengers.
"With their plans for improving the punctuality, reliability and
accessibility of their services through close collaboration with
Network Rail, we are proud to partner with GTR to create a truly
passenger focused service."
Christian Schreyer, Go-Ahead CEO, said:
"I'm delighted with today's announcement. Under this new
contract we will build on our achievements in enhancing performance
in recent years. We will be working closely and collaboratively
with DfT, NR and other partners to run the most reliable service
possible, and we will be putting passengers' interests first.
"A top priority is to build passenger numbers back after the
COVID-19 pandemic. Go-Ahead will bring commercial acumen and
international experience to bear in encouraging people back to the
railways."
Alistair Gordon, Keolis UK CEO, said:
"We're pleased that the hard work of the team at GTR -
especially over the difficult past few years - has been recognised.
We are particularly heartened by the commitment of an ambitious
green agenda and strengthening the business' passenger centred
approach during the contract. We're proud to be playing our part in
the future of Britain's railways."
Patrick Verwer, GTR CEO, said:
"We welcome this positive news, which marks the start of a new
era for GTR. I'm incredibly proud of how far we have come,
including overcoming two challenging years dominated by Covid. All
of this is thanks to the continued focus and passion that GTR
colleagues bring to work every day.
"I'm delighted that GTR's long-standing experience in running
the UK's largest train network, our focus on improving the customer
experience and our strong local community relationships have been
recognised. This new agreement means we can continue to build on
what we have achieved to date as we focus on welcoming more people
back to the railway."
The person responsible for arranging the release of this
announcement on behalf of the Group is Carolyn Ferguson, Company
Secretary.
ENDS
For further information, please contact:
Media - Andrew Clark 07977 343846
Investors - Holly Gillis 07940 797560
Go-Ahead
Go-Ahead is a leading public transport operator, connecting
communities through bus and rail services. Our purpose is to be the
local partner taking care of journeys that enhance the lives and
wellbeing of our communities across the world.
We employ more than 27,000 people across our bus and rail
businesses in the UK, Singapore, Ireland, Norway and Germany. In
addition to the travelling public, our customers include
governments and local authorities. We are committed to tackling
climate change, poor air quality and social isolation.
Bus
Go-Ahead is one of the UK's largest bus operators. We run a
fleet of more than 6,000 buses across England and run a quarter of
London's buses for Transport for London. Outside London, we serve
high-density commuter markets in the North East, Greater
Manchester, East Yorkshire, Oxfordshire, East Anglia, the South
East and the South West of England. We also operate a bus contract
in Singapore and two bus contracts in Ireland.
Rail
We operate rail franchises in the UK, Germany and Norway. In the
UK, we run the country's largest passenger contract, Govia
Thameslink Railway, comprising Southern, Gatwick Express, Great
Northern and Thameslink. This is managed through our 65 per cent
owned subsidiary Govia, which is 35 per cent owned by Keolis. In
Germany and Norway, our contracts are run exclusively by
Go-Ahead.
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END
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