Minister Says Nationalisation an Option For Local Rail Services

Current South Western Railway franchise 'not sustainable long term'

Transport Minister Grant Shapps has indicated that the government is considering nationalisation as one of the options for the future of the South Western Railway (SWR) franchise.

This would mean that mainline train services through stations such as Putney, Brentford, Wandsworth Town and Chiswick would be taken back into public ownership.

SWR’s latest accounts showed that the train operating company is making substantial losses and the auditors have said there is ‘material uncertainty’ over its operations. SWR reported losses of £136.9million as they wrote off £146million in the value of a contract in the year to March 2019. On an operating basis excluding the write off, the company saw revenues of over one billion pounds and saw passenger growth of 6% with a profit of £7million.

The report concludes, “The directors have concluded that there is a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”

Since these accounts were published the company has been hit by a prolonged strike by RMT members during December which has impacted costs and revenues.

The Minister said in a written statement to parliament that the franchise which is a joint venture between FirstGroup and the operator of Hong Kong’s public transit system ‘is not sustainable in the long term’ but that a new contract for the operator was also being considered. Although the company has not yet failed to meet its financial commitments, Mr Shapps said that the Department for Transport “must prepare suitable contingency measures”, including handing the routes over to the state-owned operator of last resort.

Rail Union RMT called the Minister’s statement a ‘cop out’ and demanded immediate nationalisation. They claim that the government’s commitment to introducing Driver Only Operation discriminates against the disabled and that railway workers should not be blamed for taking strike action over safety issues.

RMT General Secretary Mick Cash said, “This government is acting like a puppet for the rail companies, throwing good public money after bad and trying to breathe life into the rotting corpse of privatised rail.

“Instead of dreaming up new ways to subsidise private sector profits by attacking civil liberties, he should stop pushing cost-cutting driver only operation and bring SWR into public ownership, running it in the interests of passengers and workers not his mates in the City.”

January 22, 2020