GOVIA HAS agreed a new direct award franchise with the Department for Transport to continue operating Southeastern services until at least October 2021.
The new deal takes the form of a management contract, with DfT taking revenue risk and Govia being paid a management fee equivalent to a maximum of 2% of Southeastern’s costs prior to the coronavirus pandemic. The deal began on 1 April and runs to 16 October 2021, with an option to extend until 31 March 2022.
Southeastern has previously been operated under a standard franchise arrangement in which the operator takes revenue risk. Go-Ahead Group, the 65% majority partner in Govia, notes in its announcement of the new deal that around 90% of its total revenues are now derived from contracted markets where there is no direct revenue risk from changes in underlying travel demand.
The operator says the immediate focus will be on providing services for key workers during the pandemic. After this the contract will deliver ‘a range of customer experience improvements’, including exploring options to boost capacity as additional rolling stock becomes available. Work will also continue with Network Rail to develop a longer-term capacity, rolling stock and punctuality strategy for the network beyond 2022. DfT says Southeastern passengers will see ‘space for thousands of extra passengers during the morning and evening peak times’.
Govia has operated Southeastern since 2006, and under direct award arrangements since 2014.