The Southeastern rail franchise is being taken over by the government after what was described as “a serious breach of the franchise agreement’s good faith obligations” in relation to financial matters was identified.
An investigation conducted by the Department for Transport (DfT) is said to have found that since October 2014, London and Southeastern Railway Limited (LSER), which operates the Southeastern railway had not declared over £25 million of historic taxpayer funding which should have been returned.
Southeastern’s shareholders (Go-Ahead and Keolis) commissioned an independent review into this matter on 11th August led by their respective Chairs. Although the independent review is ongoing the Group acknowledges that errors have been made in relation to the franchise.
The company’s Chief Financial Officer, Elodie Brian has decided to resign and will be standing down from the Board with immediate effect.
The Go-Ahead Group’s Chairman, Clare Hollingsworth, said: “We recognise that mistakes have been made and we sincerely apologise to the DfT. We are working constructively with the DfT towards a settlement of this matter.”
The money has now been repaid to the government and further investigations are being conducted by the owning group into all related historic contract issues with the railway franchise. Following these investigations, the government says that it will consider further options for enforcement action.
The franchise was due to be renewed next month, but rather than renewing it, the DfT has decided to transfer it to the government’s in-house Operator of Last Resort (OLR), which already manages the London North Eastern Railway (LNER) and Northern railways.
So from 17th October, Southeastern rail services will be run by the government. As with other franchise takeovers, initially, there will be no changes to fares, tickets or services.
Transport Secretary Grant Shapps, said: “There is clear, compelling and serious evidence that for years, LSER have breached the trust that is absolutely fundamental to the success of our railways. When trust is broken, we will act decisively.”
Further details on how the Operator of Last Resort will manage Southeastern will be set out later this year.
In addition to the commuter and regional services in Southeast London and Kent, Southeastern also operates the HS1 “javelin” services into St Pancras station.
Article last updated on September 30th, 2021 at 03:25 pm