The cost of the decision to strip Southeastern of its franchise has now risen to more than £80 million, Go-Ahead Group has revealed.
The franchise had been run by Govia - a joint venture between Go-Ahead Group (65%) and Keolis (35%) - since 2006, before being transferred to the Government’s Operator of Last Resort in October 2021 following a failure to declare more than £25m in taxpayer funding that should have been returned.
The Go-Ahead Group subsequently admitted that “serious errors” were made and apologised to the Department for Transport.
Trading in its shares was then halted on the London Stock Exchange in early January, following a decision to postpone its full-year financial results for 2020-21 so that an audit could be completed.
In its delayed full-year results, which were eventually published on February 24, Go-Ahead revealed that an independent review had found that the full amount owed to the DfT was in fact £51.3m (including the previously identified £25m), of which £49.2m has been repaid.
It added that this liability could rise even further by an estimated £21.3m, but that this is subject to ongoing commercial negotiations with the DfT.
The train operating company owning group has also set aside £30m to cover an expected fine from the DfT, although the Government has yet to confirm any penalty.
Aside from Southeastern, Go-Ahead reported a strong financial performance in its bus operations and the Govia Thameslink Railway franchise that it continues to operate.
An adjusted operating profit of £115.5m was recorded, which contributed to an overall statutory loss before tax of £6.9m.
“It’s been a challenging year for Go-Ahead and our shareholders, for which I apologise on behalf of the board,” said Group Chief Executive Christian Schreyer.
“I’m pleased to be publishing these results today and I am looking firmly to the future with optimism. The Group’s operating performance is strong, and we are seeing a reassuring recovery in passenger volumes across bus and rail following the impacts of COVID-19.
“In relation to London & South Eastern Railway, we are optimistic that the outstanding matters will soon be settled with the DfT.”
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