SWR no longer sustainable, admits transport secretary
Transport secretary Grant Shapps has admitted today that the South Western Railway franchise is ‘no longer sustainable’. There has been an immediate backlash from the rail unions, who are calling for SWR to be renationalised. In a written statement to Parliament Mr Shapps said: ‘South Western Railway’s recent financial statements have indicated that the franchise is not sustainable in the long term. Poor operational performance, combined with slower revenue growth, has led to the financial performance of SWR to be significantly below expectation since the franchise commenced in August 2017.’
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Transport secretary Grant Shapps has called for more information before a decision is made about HS2. A leaked copy of the Oakervee Review is reported to have given the scheme a ‘lukewarm’ welcome, but it also says the total cost is set to be some £106 billion, compared with the £55.7 billion at 2015 prices which ministers were still insisting was correct as recently as last summer. Various options are apparently included by Oakervee, including a possible ’pause’ in building the later phases beyond Birmingham to Manchester and Leeds.
Arriva has agreed to settle with the Department for Transport over the rejection of its bid for East Midlands on the grounds that its submission was ‘non-compliant’ in its attempt to modify pensions risks. Stagecoach was also refused for the same reason, and the East Midlands contract was awarded to the only remaining bidder Abellio, which launched East Midlands Railway last year. Arriva was reported to be claiming £200 million for its exclusion, but the terms agreed are being kept confidential.
< Network Rail put on warning over poor performance >
A leaked copy of the forthcoming Oakervee Review into HS2 is reported to be warning that the costs of the project could rise again, to £106 billion. The original budget still being confirmed by ministers last summer was £55.7 billion, including substantial contingency margins. It later rose to an estimated maximum of £78 billion after fresh calculations by HS2 chairman Allan Cook.
Legal action threatened by Stagecoach, Virgin, SNCF and Arriva over the cancellation of their bids for three franchises is about to start in the High Court. The court is to hear claims that the Department for Transport ‘mismanaged’ the competitions for Intercity West Coast, East Midlands and South Eastern when it ruled that bids from the four firms were ‘non-compliant’ because they tried to reduce pensions risks.