Officials of the UK Department for Transport (DfT) are considering splitting up the Thameslink, Southern and Great Northern rail franchise (TSGN) on expiry of the existing contract in 2021. GTR was awarded the TSGN franchise in May 2014, but it has been under increasing scrutiny, with Southern embroiled in a dispute with trade unions for more than a year.
“In advance of the expiry of a franchise contract the Department considers the size and scale to ensure new train operations best meet passenger needs,” a spokesperson for the DfT said. DfT officials discussed reducing bidders’ risks on franchises at a meeting last month, with the possibility of the government paying train operators if their revenue falls short of forecasts, but enforcing close financial monitoring.
The TSGN franchise’s unusual structure has also come under scrutiny, as it uses a management contract where fare income does not go to GTR. The DfT receives revenue from ticket sales and takes on the revenue risk, with the company operating the service in exchange for a management fee. A report from the Transport Select Committee earlier this year said that this exposed the DfT financially.
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