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COVER STORY: DfT 'let passengers down’ on GTR franchise, says NAO

GTR 700041 at Farringdon on January 12. RICHARD CLINNICK.

Government has not received value for money from the Govia Thameslink Railway (GTR) concession, according to a National Audit Office report published on January 10.

In its report into the GTR deal, NAO said: “The Thameslink programme has a realistic chance of achieving value for money and the return to the Department from the franchise has broadly met its expectations. However, passengers have suffered periods of significant disruption during the first three out of seven years of the franchise.

“While industrial action has been a major contributor to disruption, on a scale which would have been difficult for the Department to foresee, the Department did make decisions on this franchise, the cumulative effects of which have negatively impacted on passengers. We cannot therefore conclude that the Department has to date achieved value for money from this franchise.”

Between September 2014 and August 2017, DfT received £3.6 billion in fare revenue, broadly in line with its expectations. It made franchise payments to GTR of £2.8bn, meaning a return of £760 million for the taxpayer, net of £33m of passenger refunds paid by the DfT.

NAO said GTR had not earned profits expected on this deal to date. It has incurred £5.25m losses after tax over three years. At this point a forecasted profit of £130m was expected.

This was attributed to: GTR underestimating costs in its bid, including Network Rail charges and cost of drivers; unrealised efficiency savings; financial penalties from DfT based on poor performance; GTR adding extra operational managers to deal with timetable changes and performance issues; and interim staff hired to deal with London Bridge disruption and delayed modernisation plans.

NAO also highlighted that during the bidding process, concerns had been raised by Network Rail regarding the timetable plans put forward by Govia (see panel).

NAO Head of Office Amyas Morse said: “Over the last three years, long-suffering passengers on the Thameslink franchise have experienced the worst performance on the rail network. Some of the problems could have been avoided if the Department had taken more care to consider passengers in its design of the franchise.”

  • The full story, and full reaction, appears in RAIL 844, out today, and also available on Android and iPad. 

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  • FrankH - 17/01/2018 15:35

    "Some of the problems could have been avoided if the Department had taken more care to consider passengers in its design of the franchise.” DFT wants this this and that for a new franchise and the bidders abide by that and the best offer wins. Network rail warned about the timetable plans put forward by Govia who were responding to what the DFT wanted. Read paragraph 6, GTR underestimated all sorts of things some unforseen. Extra staff being one.

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