THE government has ordered plans to be drawn up for the nationalisation of South Western Railway.
The loss-making company’s finances were described as “not sustainable in the long term”, by transport secretary Grant Shapps who today (Wednesday) said he had requested precautionary measures to ensure the service continues.
He has asked the Department for Transport to draw up proposals for managing the loss-making franchise, and told SWR’s owners to come up with an alternative new short-term contract with tighter performance requirements.
The two options will be evaluated before deciding what course of action to take, Mr Schapps said.
He promised: “This will not impact on the railway’s day-to-day operations. The business will continue to operate as usual with no material impact on SWR services or staff. Parliament will be kept informed of developments.”
As reported in the A&T, earlier this month SWR was rocked by report from its own auditors which raised “material uncertainty” over its future and raised the prospect of nationalisation.
The company has been hit by strikes and delays which have infuriated passengers, including those using the New Forest and Lymington lines, such as Brockenhurst College students and commuters to Bournemouth and Southampton.
SWR, which made a loss of £137m in 2018/19, is jointly owned by FirstGroup and Hong Kong-based MTR. The government awarded it the seven-year franchise more than two years ago which was previously held by South West Trains, run by Stagecoach.
Mr Shapps said: “South Western Railway’s recent financial statements have indicated that the franchise is not sustainable in the long term.
“Poor operational performance, combined with slower revenue growth, has led to the financial performance of SWR to be significantly below expectation since the franchise commenced in August 2017.”
He said he was acting under the Railways Act 1993 which put a legal requirement on the transport secretary to ensure services that passengers depend on continue in any circumstance.
If SWR were stripped of the franchise it would be handed over to what is known as the Operator of Last Resort, a public sector operator wholly owned by the Department for Transport.
Mr Shapps said: “SWR have not yet failed to meet their financial commitments and my department will ensure that SWR are held to their financial obligations under the current franchise.”
He went on: “Whoever operates SWR services, I will remain committed to modernising services and improving support for passengers.
“The railway is a public service. People rely upon it to support their way of life, livelihoods, education and healthcare, and it is why this government has committed to introducing minimum service levels during times of strike action.”
The announcement came a day after MPs formed a new group to hold SWR to account in parliament. The all-party group has been joined by New Forest West Sir Desmond Swayne, who said he is a regular passenger on the network.
New Forest East MP Julian Lewis told the A&T he had been in contact with it to join too.
Christchurch MP Sir Chris Chope said he would not be an active member but added: “I take a keen interest in the service – or lack of it – that is being provided by South Western Railway.”
A spokesperson for FirstGroup/MTR said it was continuing with “ongoing and constructive discussions” with the Department for Transport and would respond to its request in the coming weeks.
An SWR spokesperson added: “Together with Network Rail, we are working hard to improve our performance and have set up a joint performance improvement centre to address specific issues head on.”