30th Mar 2020 10:58
(Alliance News) - Go-Ahead Group PLC on Monday said the UK Department for Transport has awarded a Direct Award contract to subsidiary Govia for continued operation of the Southeastern trains franchise.
The FTSE 250 company said the new contract - which runs from April 1 until March 31, 2022 - is part of the Department for Transport's Emergency Measures Agreement which transfers all revenue and cost risk of rail franchises to the UK government to ensure that trains keep running, allowing key workers to keep travelling. Govia will continue to run day-to-day services for a management fee of up to 2% of Southeastern's cost base before the pandemic began.
"This new contract provides continuity and stability during a challenging time. The immediate priority remains the health and well-being of colleagues and customers, and to support society by providing an essential service for key workers," said Go-Ahead Chef Executive David Brown.
Go-Ahead owns 65% of Govia, with France's Keolis SA having the other 35%.
The company noted that 90% of its revenue comes from contract with no direct revenue risk from the fall in travel demand.
Go-Ahead shares were trading 2.7% lower at 730.00 pence each on Monday morning in London.
By Ife Taiwo; [email protected]
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