West Coast rail: Virgin Trains and Stagecoach net £51.2m in dividends

October 19, 2018

Virgin Trains and Stagecoach shared in £51.2m worth of dividends from the West Coast main line railway, shortly before walking away from another franchise.

Virgin Rail Group’s dividends, for the year ending 31 March 2018, are almost double the £27.9m that was given back to its shareholders in 2015.

The details come after the firms’ East Coast franchise collapsed in June, with the government losing out on £2.3bn.

Virgin said strong performance had led to record payments for taxpayers.

But Labour said the failing rail system was “lining the pockets of billionaires”.

Virgin owns 51% of the operator which runs the West Coast main line connecting London to Glasgow – known as Virgin Rail Group – while Stagecoach owns the remaining 49%.

Failed franchise

The companies were also joint owners of the East Coast franchise.

In June, both Stagecoach and Virgin Trains dropped out of the contract.

The two firms ran the East Coast main line for three years from 2015, promising to pay £3.3bn to run the franchise until 2023.

But by the end of 2017 it was clear they were in trouble, and in June the East Coast franchise was handed back to the government.

At the time, Labour and trade unions accused Virgin of costing taxpayers £2bn.

Mr Grayling told the House of Commons in May that Stagecoach and Virgin had lost almost £200m on the failed East Coast franchise, but there had not been a loss to taxpayers “at this time”.

A Virgin Train

Reacting to news of the West Coast dividend, Labour’s Rachel Maskell told the BBC it was “shocking” that money from the franchise was not being put back into the railways.

Related: After losing TWO major rail franchises, Stagecoach makes it easier for bosses to land their bonus

She said: “At the same time, Transport Secretary Chris Grayling is letting them off a £2bn bill [for the East Coast franchise] which the taxpayers are having to bail out.

“This shows how franchising completely fails the public… buying a ticket is so extortionate these days that many people can’t afford to travel by rail.”

She added that Labour wanted to see dividends reinvested into publicly-owned railways that put passengers at the heart of business.

A spokesperson for Virgin Trains said that the West Coast line had seen “industry-leading levels of customer satisfaction thanks to innovations such as automatic delay repay, free films and TV on board, and mtickets”.

A Department for Transport spokesperson said that privatisation had helped to “transform” the UK’s railways innovation, investment and improved customer service: “Virgin Trains continue to be the leading long distance operator in the National Passenger Survey results delivering consistently high customer satisfaction.

“West Coast passengers will see ongoing investment and innovation with the introduction of the West Coast Partnership in 2019.”

Source: BBC

Meet the company with a plan to green the UK’s train fleet

October 10, 2018

Alstom launched the world’s first hydrogen powered passenger train in Germany last month, and it has a plan to bring green trains to the UK.

Passengers boarding the Coradia iLint train running between Cuxhaven, Bremerhaven, Bremervörde and Buxtehude, small towns in the bucolic German region of lower Saxony, may not know they are making history.

There are a few clues for the eagle-eyed: the train, developed by European engineering giant Alstom, is liveried in bright blue, and inside the carriages it is eerily quiet without the rumble of the diesel engine.

But even if they are unaware of the significance of their journey, passengers on the Coradia iLint are nevertheless pioneers in the green train movement, as some of the first people to board the world’s first commercial passenger train running purely on hydrogen.

The train – actually there are two trains, now in commercial service in Lower Saxony – are the result of a four-year partnership with the local regional government to replace part of the existing diesel fleet servicing the area. They are each equipped with on-board fuel cells to turn hydrogen and oxygen into electricity, emitting only water vapour as a result.

With a range of 1,000km, they can run for the whole day, and overnight refuelling takes place at a mobile filling station next to Bremervörde station, using hydrogen produced in part with renewable power.

It’s just the start of a wider rollout in the area. Alstom is scheduled to deliver 14 more trains, and a permanent refilling depot, in Lower Saxony by 2021. And it’s just the beginning of what the train builder hopes will be nothing short of a hydrogen revolution in the world of train travel.

With less than 50 per cent of the rail network electrified and a similar reliance on diesel trains to service its smaller ‘feeder’ routes, the UK is the next country in Alstom’s crosshairs. The policy conditions appear promising – in February the UK government announced an ambition to eliminate diesel powered trains from its network by 2040, but just months earlier ditched plans to electrify swathes of the rail network, citing cost concerns. That controversial decision may mean more pollution in the short term, but it could also open the door for hydrogen.

While electric power is speeding ahead in the car market, for trains it’s a different story. Battery technology is simply not developed enough as yet to deliver trains that can run significant distances without additional power lines to draw electricity from, making electrifying routes a laborious and expensive process. Hybrid trains are one solution, but fitting multiple power trains into a carriage can impact efficiency and limits the climate benefits on offer.

That leaves seemingly only one solution, argues Mike Muldoon, head of business development and marketing at Alstom: hydrogen.

“The UK was never intended to be electrified, even under the most ambitious recent plans,” he says. “And the reason for that is that fundamentally there isn’t a business case to do those electrification projects. You’d be running across some very small railways, around very rural routes and regional railways that wouldn’t justify that level of investment.

“But it’s on those regional routes, with lower traffic levels and slightly smaller trains running slightly slower, that we think hydrogen is the direct replacement for all those diesel chuggers which are out there at the moment.”

Hydrogen offers clear climate benefits to diesel, he stresses, even when using so-called ‘grey hydrogen’ – produced via electrolysis powered by fossil fuels. “Very often in discussions about hydrogen comparisons are drawn with other forms of generation,” Muldoon says. “We’re looking at a comparison to diesel emissions. And in that, even without carbon capture hydrogen offers a significant reduction in the overall carbon footprint of the train. So we can save going on 50 per cent of its carbon emissions using grey hydrogen.”

And then there is the potential for green hydrogen. Advocates of the fuel have long argued that it could play a critical role in an ultra-low carbon energy system, using renewable power generated overnight when there is less demand on the grid to manufacture green hydrogen, effectively providing a highly versatile form of renewable energy storage.

Alstom has wasted no time in making its play for the embryonic UK hydrogen train market. The train giant agreed a partnership with Eversholt Rail in April 2018 to start work on converting an electric Class 321 model of trains to run on hydrogen for the UK network.

However, it’s not a case of simply transferring the new technology from Germany to the UK – British trains run on a smaller gauge, so everything from the fuel cell to the on-board battery has to be re-engineered to fit a smaller space.

It also has to work within the complex world of the UK franchise system. In Lower Saxony, the regional authority buys the trains and franchises the operations of them out to a local operator.

In the UK, the picture is slightly more complex. Companies known as roscos – of which Eversholt is one – own the trains, which are then used by rail operators who have won a franchise to operate a route. “By converting the 321 we will create a new train that will come with a lease price attached,” Muldoon explains. “That lease price will need to be paid by the operator in order to operate the train. So that will need to be modelled as well as infrastructure costs.”

Although the upfront cost of a hydrogen train over a diesel one is higher, the costs can be recouped over the life of the train through savings on running costs, according to Alstom. In Germany, the trains have a payback period of 12 years on diesel, the firm says.

In an effort to develop a franchise offer using a hydrogen train capable of winning a bidding war, Alstom is already in close discussions with train operators to develop a model that works. “It’s potentially quite a difficult market to enter with a higher risk innovative project,” Muldoon says. “We recognise that to offer them a product which doesn’t win them a franchise won’t see this product launched.”

To give hydrogen trains a head start in the UK, Muldoon wants to see the government prioritising hydrogen power when it considers rail franchise bids. “We need to see the introduction of this technology to be a winning factor in future franchises,” he argues. “Not something that is lost in detailed models, but a real challenge to industry to actually bring it forward.”

If it can find an operator which can win a franchise, Alstom is aiming to get the first fleet of hydrogen trains in service in the UK by early 2022. But Muldoon is under no illusions that the UK will completely convert to hydrogen. “It doesn’t replace electrification – even in the wildest dreams of those of us who are supporters of hydrogen are firmly behind mainline and high speed being electrified, because that makes sense,” he admits.

Hydrogen trains may only ever be part of the solution to greening the UK’s train fleet. But with the government under increasing pressure to tackle the country’s rising transport emissions, and budgets too tight for vast electrification projects, it could just be the answer to part of the problem.

Source: Business Green

After losing TWO major rail franchises, Stagecoach makes it easier for bosses to land their bonus

August 27, 2018

Stagecoach has come under fire for making it easier for bosses to be paid bonuses after it was stripped of the East Coast rail franchise by the Government.

Influential shareholder advisory group Glass Lewis is urging investors to vote against chief executive Martin Griffiths’ pay plan at the train and bus operator’s annual meeting on Friday.

In a report sent to investors, seen by The Mail on Sunday, Glass Lewis lambasts the firm for failing to explain why it lowered the profit targets for Griffiths to get a long-term performance bonus of up to £1 million.

Stagecoach has lost two major rail franchises since the previous target was set in June 2016.

The company came under fire earlier this year after Transport Secretary Chris Grayling took away the East Coast mainline franchise. The line from London to Edinburgh was supposed to have been operated from 2015 to 2023 by the Virgin Trains East Coast franchise – which is 90 per cent owned by Stagecoach and 10 per cent by Richard Branson’s Virgin.

But Grayling said the firms ‘got their bid wrong’ and overestimated how profitable it would be.

Related: Stagecoach East Coast rail line franchise ‘to be axed in days’

Last year, Stagecoach also lost its South West Trains franchise to a consortium including FirstGroup. It ran the service since its privatisation in 1996.

Griffiths agreed with his board that he should receive no bonus for the 2017-18 financial year, in part because of the East Coast fiasco. His total pay for the year was £987,000, but moving the goalposts on his bonus targets will make it easier for him to get one in future.

Under new rules, Griffiths and finance boss Ross Patterson need to pull in earnings of 24.4p to 25.7p per share to get bonuses, down from between 28.9p and 31.9p.

Glass Lewis says it ‘firmly questions’ the lack of an explanation to shareholders on why the target has been cut.

A Stagecoach spokesman said its pay policy was backed by 95 per cent of investors at last year’s annual meeting and noted that another shareholder advisory group, ISS, is recommending that investors back the board.

‘Challenging long-term incentive payment targets are also set every year, taking into account the nature and scale of the business, internal forecasts and market consensus,’ the spokesman added.

‘It is only proper that these targets will change from year to year.’

Source: This is Money

Former Network Rail chief rejects franchising model

July 12, 2018

THE first chief executive of Network Rail has dismissed the present system of rail franchising as ‘bust’.

Sir John Armitt, who is now chairman of the National Infrastructure Commission, has highlighted the facts that Network Rail was ‘effectively renationalised’ in 2014, and that franchise holders shoulder high commercial risks because, he claims, the Department for Transport takes the highest and most optimistic forecasts of revenue when considering bids.

Sit John, who was in charge during the transition from privatised Railtrack to ‘not for dividend’ Network Rail in 2001-02, said the degree of revenue risk accepted by franchise-holders had ‘got them into trouble’, such as when Stagecoach and Virgin were forced to surrender the Intercity East Coast franchise in May.

They were the third operators on the route to retreat at an early stage. In each case, VTEC, GNER and National Express all found that revenues were not enough to meet the premiums they had promised to pay.

Other franchises have also needed to prop themselves up recently. Abellio pumped an additional £10 million into ScotRail and FirstGroup made provision for a total deficit of more than £100 million on Transpennine Express between now and 2023.

Related problems have also appeared, particularly since 20 May this year when both Govia Thameslink Railway and Northern proved unable to operate new, ambitious timetables. These have since been cut back, and the Rail Delivery Group has now said that the next round of timetable changes in December this year will be much less radical.

Sir John told the BBC: “The rail franchise companies, as we’ve seen, have to take very significant revenue risk, and that’s got them into trouble, because the government will always go for the most optimistic forecast of revenue.

“That model, I think, is bust, and it needs to be reviewed, and a more appropriate sharing of risk on the railway needs to take its place.”

The DfT says it applies a ‘deliverability test’ when assessing franchise bids. When National Express won the Intercity East Coast contract in 2007 it was widely rumoured that another bidder had offered even higher premiums, which the DfT decided would not be achievable.

Source: Rail News

Stagecoach takes hit from East Coast franchise

June 30, 2018

STAGECOACH has seen profits tumble as the Perth-based transport giant booked a hefty charge linked to its problems on the East Coast rail franchise, and slashed its total dividend for the year.

And it warned operating profits from its UK rail operations will fall in the current year, with the cost of bidding for new franchises expected to offset profits from its East Midlands Trains contract.

The Edinburgh to London line was renationalised this month after the UK Government stripped Stagecoach and partner Virgin Trains East of the franchise in May. The partners had won the contract in 2014 with a deal to run the franchise until 2023.

The renationalisation came after Stagecoach reported mounting losses on the £3.3 billion franchise last year, with the company admitting its operation of the line had not led to the revenue and profits it anticipated when it won the contract.

Related: Stagecoach East Coast rail line franchise ‘to be axed in days’

Boss Martin Griffiths repeated that he was “surprised and disappointed” at Transport Secretary Chris Grayling’s move to renationalise the line as the company reported “significant exceptional costs” of £85.6 million relating to the franchise. Underlying profits at the group, founded by Sir Brian Souter and sister Ann Gloag in 1980, fell to £144.8m from £151m.

Group revenue was also down at the bus and rail giant, falling to £3.2 billion from £3.9bn as a result its South West Trains franchise ending in August. Revenue from UK rail dipped to £1.5bn from £2.1bn, with operating profit down 12.6% to £24.9 million.

However, Mr Griffiths highlighted “positive changes” to the franchise model, which he said will lead to the revenue risk being more evenly shared between operators and the Government.

He said: “We are pleased with the group’s underlying financial performance for the year ended 28 April 2018, when compared to our start of the year expectations.

“We were, however, surprised and disappointed by the Secretary of State for Transport’s decision to appoint an operator of last resort to take over the operation of InterCity East Coast train services from our Virgin Trains East Coast business. We are also disappointed to report significant exceptional costs in relation to that business.”

The company slashed the full-year dividend to 7.7p from 11.9p on its reduced exposure to rail. “Whilst the board understands the importance of dividends to its shareholders, the board also feels the dividend needs to be set at a level from which it can grow over time as well as being covered by normalised non-rail cash flows,” Mr Griffiths added.

Helal Miah, analyst at The Share Centre, said: “This slashing of the dividend may have been more drastic than expected but there was additional disappointment from management’s view that the rail business would continue to face declining profits while being exacerbated by new franchise bidding activity. Its bus operations however are doing well both in the UK and North America.”

The group said regional UK bus revenue was down 0.3% at just over £1bn. Its bus operation in North America saw revenue fall by 0.4% to $630m. Shares rose 4.3% or 5.8p, closing at 139.9p.

Source: Herald Scotland

Final day for Virgin Trains east coast route franchise

June 25, 2018

Virgin Trains East Coast (VTEC) is running services on the East Coast Main Line for the final day on Saturday following the failure of the franchise.

Trains on the route will be brought back under public control from Sunday, with the London North Eastern Railway (LNER) brand being resurrected from the 1940s.

The East Coast route connects London King’s Cross to stations in the North and Scotland including York, Leeds, Newcastle, Edinburgh, Aberdeen and Inverness.

Virgin Trains East Coast, a joint venture between Stagecoach (90%) and Virgin (10%), began operating in March 2015.

The firms agreed to pay the Government £3.3bn to run trains until 2023, but the contract was ended prematurely after they failed to achieve revenue targets.

Related: Fresh East Coast agreement with Virgin and Stagecoach would be ‘real scandal’

Stagecoach lost around £200m over the course of the contract.

Transport Secretary Chris Grayling refuted accusations from Labour and trade unions that his decision to end the deal early was a “bailout” worth £2bn.

“Stagecoach will be held to all of its contractual obligations in full,” the minister said.

VTEC managing director David Horne has been appointed to the same role at LNER.

All VTEC staff will transfer to the new franchise.

The switch from VTEC to LNER is costing an estimated £8m in terms of marketing and rebranding.

VTEC did report a 5% growth in passenger numbers in recent months, building on the 21.8 million journeys taken in 2017/18, up 1.3 million from when the franchise began.

Stagecoach chief executive Martin Griffiths said: “Our people can be fiercely proud of everything they’ve achieved: from delivering huge investment and high levels of customer satisfaction, to providing new services and benefits for passengers and creating hundreds of new jobs.

“The growth we’re now seeing proves our initiatives are paying off and the railway we hand over to LNER is not only better than we inherited, but one that has been positively transformed for customers and ready to continue our journey of improvement with the introduction of the new Azuma train fleet from December.”

Mr Grayling has not placed restrictions on Stagecoach or Virgin’s ability to bid for future franchises, stating that “there is no suggestion of either malpractice or malicious intent”.

Virgin Trains East Coast is the third private operator to fail to complete the full length of a contract to run East Coast services.

GNER was stripped of the route in 2007 after its parent company suffered financial difficulties, while National Express withdrew in 2009.

Trains were run by the DfT for six years up to VTEC taking over.

Passengers are being assured that the transition to LNER will be smooth, with tickets, timetables and trains staying the same.

The first LNER train will be the 7.54am departure from Newcastle to London King’s Cross on Sunday.

Source: STV

South Western Railway passenger journeys dropped by 18m last year as franchises veer off track

June 17, 2018

Embattled train operator South Western Railway (SWR) saw a dramatic drop of 18m passenger journeys over the past year as it grappled with engineering works at Waterloo, a switch in franchise ownership and industrial action.

London’s busiest station underwent an upgrade in a bid to boost capacity by 30 per cent, which has largely contributed to the drop as platforms closed and industrial works are carried out.

However, SWR has also been hit with industrial action over the past year, with the latest round of strikes due to hit commuters later this month between the 21st and 23 June.

The data from the rail regulator the Office for Road and Rail (ORR) paints a bleak picture for the franchise model that dominates the UK rail industry. It has come under serious scrutiny over the past year owing to collapse of the joint venture between Stagecoach and Virgin Trains on the East Coast franchise.

Overly optimistic predictions on the growth of passenger numbers led to losses of £200m, forcing the government to renationalise the line. The formal handover will take place at the end of the month.

Another franchise that has had a kicking from commuters has been Govia Thameslink Railway (GTR), which suffered a 2m drop in passenger numbers over the past year thanks to staffing shortages, industrial action and planned cancellations.

The dramatic drop marks the second year in the row that passenger numbers have fallen on the franchise. GTR, which runs the Thameslink, Southern, Gatwick Express and Great Northern services, still recorded the largest of passenger journeys, however, at 319m.

The ORR data is another blow for the rail industry. Franchised rail passenger journeys dropped for the first time since the financial crash, falling to 1.7bn. The decline was driven by a 9.2 per cent fall in season ticket journeys as customers shifted towards using ordinary tickets as strikes and cancellations make it harder to plan ahead.

A decade ago, season tickets accounted for 48 per cent of market share; this has now dropped to 38 per cent. However, while the volume of season ticket journeys has fallen in the last two years, advanced, anytime and off-peak tickets have increased over the same period.

Revenue for season tickets was at its lowest level since 2013-14, but the price of an individual ticket rose to £5.66, an increase of 3.7 per cent compared to the previous year.

Rail Delivery Group chief executive Paul Plummer said: “There are over 1.7 bn rail journeys made every year and despite some slowing down, this growth isn’t expected to hit the brakes in the long term. While technology may mean fewer people are travelling into work every day, anyone taking the train into our major cities will know that investment to run more trains is essential.

“To meet the increased demand for rail over the coming decades, rail companies are working together to deliver record investment in rail to improve for customers, communities and the economy, including introducing 6,400 extra services a week by 2021.”

Source: City A.M.

Rail Wales franchise decision imminent

May 27, 2018

The new Wales rail franchise holder will be held to account on issues like punctuality, cleanliness and service quality – or they will not get paid.

The head of Transport for Wales (TfW) said the contract includes key elements of service provision not included before.

The winner – also new South Wales Metro operator – is expected to be unveiled in the next 24 hours.

Welsh Government ministers are discussing final details on Tuesday.

The new franchise will come into effect from October 2018, replacing the one run by Arriva Trains Wales for the last 15 years.

Speaking about it for the first time, TfW chief executive James Price said the aim was to “make all parts of Wales more connected”.

He said it was more than just rail with buses, park-and-ride, active travel and other modes of transport all important.

It would also go “way beyond” commuting but also travelling for the elderly, for social reasons, for tourism and to access public services.

There will also be a cap on excess profits, with any extra surpluses re-invested in the network.

There are two bidders in the running for the contract:

KeolisAmey

In numbers

  • £6.9bn joint turnover
  • 680m passenger journeys in the UK each year
  • 21 major cities served including London, Shanghai, Boston and Nottingham
  • 32,300 people employed across both companies

KeolisAmey – the joint venture company already runs the Docklands Light Railway and the Manchester Metrolink. Keolis also runs Nottingham’s trams and claims to be the world’s largest tram operator and its major shareholder is the French state-owned railway company SNCF. It operates systems in cities ranging from Melbourne to Boston.

MTR

In numbers

  • £4.3bn turnover
  • 28,000 employees
  • 231km size of Hong Kong rail network it operates

MTR operates the Hong Kong metro – said to be the world’s busiest – and a network of 93 stations and 68 light rail stops; also the Crossrail/Elizabeth Line concession in London and is currently running Transport for London rail services.

The new deal is also likely to involve:

  • Taking 124 miles (200km) of track away from the control of Network Rail – enabling a faster investment in new technologies such as digital signalling
  • TfW – which oversees the system – would hope to take control of rail-related catering, cleaning, parking and ticketing over time
  • £5bn over 15 years of planned investment will see contracts broken up and within the grasp of local, small and medium sized businesses, to make the biggest impact possible on local communities and the economy

TfW said it was a “once in a generation” chance to design a service to meet growing passenger numbers and expectations of more reliable services.

Mr Price said: “This is the first time since devolution Wales has had the opportunity to design something for itself.

“What we’ve had before was inherited. And many people will have experienced this on a day-to-day basis: turning up at a railway station and not being able to get on the train.

“That’s a pretty big disincentive to using it and if you can’t get into the centre of a city because the roads are congested as well, that’s not an incentive for getting work.”

Commuter Regan Cartwright, who travels from Pontypridd every weekday for her job at a Cardiff hotel, said: “Sometimes it’s delayed, sometimes it’s not – you never know what to expect. I’d like more trains, more carriages, on time – you can never get a seat, it’s always rammed.”

Jessica Owens normally drives to Cardiff but she sometimes gives herself two hours for the 12 miles (20 km) journey because of “crazy” traffic.

“The only thing that puts me off getting the train is the car park situation,” she said. “Driving is cheaper for me. With the train you pay that little bit extra and you get the odd times of day when people are squished together but you don’t have the traffic – which is just horrible. ”

The decision will be announced to the Stock Exchange and in a statement to AMs.

But details of what the new franchise holder will be offering – and where – including the Metro will not be given this week and are not expected until next month.

It is to allow the losing bidder a 10 day-window to challenge the decision.

Source: BBC

Stadler sets sights on supplying trains for new franchises

May 26, 2018

Stadler is targeting more business in the UK, with upcoming franchises providing opportunities for the Swiss train manufacturer. The company is also investigating providing alternative power for its trains.

Speaking in Bussnang on May 3, before the unveiling of the first Class 755/4 bi-mode unit for Greater Anglia (see separate news story and feature), Stadler UK Marketing Director Ralf Warwel said that there were “quite a few activities” the company was looking at, suggesting East Midlands and maybe the West Coast Partnership.

The company is also keen to supply locomotives (possibly Class 68s) for the CrossCountry and Chiltern Railways franchises, where potential bidders have investigated the Class 68/Mk 5A concept about to be introduced by TransPennine Express.

Stadler is also interested in the Invitation to Tender issued by Direct Rail Services last year for ten diesel-electric locomotives, to be delivered next year.

Warwel said that the company was looking at all the products available, adding: “We are looking at alternative energy. It is too early to see technical details. Diesel is very good, but batteries are probably the furthest advanced for alternative power. Batteries are something that has the potential to be good, but technology moves so fast. Batteries need recharging, so more work is needed.”

Source: Rail Magazine

PAC lambasts ‘inadequate’ rail franchising model

May 4, 2018

The Department for Transport’s rail franchising model is “broken”, the Public Accounts Committee concluded in a report looking at two major franchises.

In scathing findings issued on 27 April, the PAC labelled the DfT’s handling of the Thameslink, Southern and Great Northern (TSGN) and the East Coast franchises as “completely inadequate”. It said passengers were paying the price.

The TSGN franchise operates services in the south east of England and also supports delivery of the Thameslink programme, which aims to improve services for passengers travelling north-to-south through London.

TSGN passengers have endured “appalling” services since 2014, with less than two thirds of trains arriving on time, the MPs said.

This was caused, the committee suggested, by the DfT being too ambitious in trying to expand services, modernise practices and support the Thameslink programme, while operating on an unreliable rail network.

PAC chair Meg Hillier said: “The operation of the Thameslink, Southern and Great Northern franchise has been a multi-faceted shambles causing untold misery for passengers.

“If taxpayers are to have any faith in government’s ability to deliver an effective passenger rail network then it must conduct and act on a thorough review before any further franchises are awarded.”

She added that passenger interests should be embedded in contracts and ensure taxpayers are properly protected should franchises fail.

The PAC also accused the department of being “ambivalent” about the risk of industrial action and neglecting to engage constructively with unions.

But the DfT called the PAC’s report “unbalanced” and said it failed to grasp the complexity of the situation.

“It also fails to understand that the department expressly created the Thameslink, Southern and Great Northern franchise to deliver the Thameslink Programme – a once-in-a-generation infrastructure upgrade to revolutionise North-South journeys through London for millions of passengers,” a spokesperson said.

“New Thameslink trains are already in service and are transforming performance for customers.

“The delay and disruption Southern passengers experienced due to strike action in 2016 was unacceptable, but services have improved dramatically and a brand new programme will begin next month bringing further improvements to their journeys.”

On the East Coast franchise, the PAC said the DfT had failed to learn the lessons of previous failures on the route and allowed operators to make promises they could not deliver.

Source: Public Finance