UK government may renationalise South Western Railway
Transport Secretary admits franchise is not sustainable as rail industry endures troubled start to 2020
The UK government is considering whether to renationalise a key rail link.
The Department for Transport (DoT) believes that the South Western Railway (SWR) contract is not financially sustainable in the long term.
SWR is currently operated by the British UK transport firm FirstGroup (FGP) and the Hong Kong-based Mass Transit Railway (0066).
Travellers using the network, which connects southern England with the capital, London, have faced repeated operating failures and widespread strike action from members of the Rail, Maritime and Transport union.
In a written statement, Transport Secretary Grant Shapps said: "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.”
Shapps added that his department was drawing up “suitable contingency measures”. These could include renationalisation or offering the current operators a new contract with a shorter term limit and strict targets.
January has proved a difficult month for the British rail industry, with the cost of the high-speed rail line project HS2 being revised up to £106bn ($139bn, €125bn) and Northern Rail facing collapse.
Although the UK Labour Party suffered its worst defeat since 1935 in the December general election, its policy of wholesale rail nationalisation polled well, with most Britons in favour .
Many point to the performance of the London North Eastern Railway (LNER) company as an example for its potential success. Owned by the Department of Transport, the LNER has operated rail lines between London and Eastern Scotland since 2018. It was previously operated by Virgin Trains East Coast, which experienced sustained financial difficulties.
An independent review of the UK’s privatised rail network headed by former British Airways CEO Keith Williams is expected to be published shortly.
FURTHER READING: UK government considers measures to save Flybe
FURTHER READING: Hang Seng Index predictions for 2020