Extended contract for Govia Thameslink Railway

Govia Thameslink RailwayThe UK Department for Transport (DfT) has awarded a National Rail Contract (NRC) to Govia Thameslink Railway (GTR) to continue train maintenance and operation of the Thameslink, Southern and Great Northern rail services, the UK’s largest railway network.

The new contract commences on 1 April 2022 and will run until at least 1 April 2025, with up to a further three years at the Secretary of State’s discretion.

The NRC, like the Emergency Recovery Measures Agreement (ERMA) contract it will replace, is a management contract which has extremely limited exposure to changes in passenger demand and no substantial cost risk to GTR.

GTR will earn a fixed management fee of GBP 8.8 million (EUR 10.55 million) per annum , equivalent to a margin of 0.5% of GTR’s cost base, to deliver the contract, with an additional performance fee of up to GBP 22.9 million (EUR 27.47 million) per annum, equivalent to an additional 1.35% margin.

Subject to the achievement of performance targets set by the DfT, the maximum fee receivable by GTR would therefore be GBP 31.7 million (EUR 38 million) per annum, equivalent to a margin of around 1.85%.

The three-year contract also allows for individual project fees to be earned by GTR on the delivery of additional initiatives as directed by the DfT.

The NRC serves as a bridge to the future Passenger Services Contracts intended to be let and managed by Great British Railways in line with the Williams-Shapps Plan for Rail, announced in May 2021.

Govia Thameslink Railway intends to phase out its diesel fleet by 2035 through introducing its first zero emission ancillary vehicles in the next 12 months and aims to increase recycling rates to 80 per cent over the next three years. The operator is currently modernising its existing train fleet.

Govia is a joint venture between Keolis (35%) and the Go-Ahead Group (65%) and has operated GTR since it was created in 2014. Govia Thameslink Railway manages 235 stations in London and the south-east of England and employs 7,400 people.


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