GTR contractual variations
The Go-Ahead Group plc (Go-Ahead) today announces that agreement has been reached with the Department for Transport (DfT) regarding the contractual variations and claims on the GTR franchise which relate to the impact of industrial action on train performance over the past 18 months.
In agreement with the DfT, GTR will fund a package of performance and passenger improvements worth £13.4m. This outcome is in line with the financial judgements made by management and consequently, expectations for the year ended 1 July 2017 remain unchanged.
Go-Ahead stated at its half year results in February that the range of uncertainty around profitability of the Group’s rail division for the year to 1 July 2017 was +/-£15m. This range related to the outcome of discussions with the DfT regarding the impact of industrial action on train performance, and other contractual variations. The contractual discussions relating to the impact of industrial action on train performance have now been resolved and the outcome is very close to management’s central judgements. The remaining range of uncertainty is +/-£5m, reflecting a number of other ongoing contractual variations; including rolling stock cascades and timetable specifications, which remain under discussion with the DfT.
This agreement resolves financial uncertainty relating to past industrial action and allows GTR to focus on improving services for Southern customers and delivering the significant passenger benefits associated with the Thameslink Programme.