View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
March 24, 2020

UK Government supports train operators during Covid-19 pandemic

The UK Secretary of State for Transport Grant Shapps has stated that railway operators have the option to temporarily transition to Emergency Measures Agreements.

The UK Secretary of State for Transport Grant Shapps has stated that railway operators have the option to temporarily transition to Emergency Measures Agreements.

To ensure that the rail services continue during the coronavirus (Covid-19) pandemic, railway operators can use the option to let the UK Department of Transport take over the franchise.

Under the Emergency Measures Agreements, normal financial operations will be suspended and all the revenue and cost risk will be transferred to the government.

The rail operators will run the daily services and will incur a small, pre-determined management fee.

For those rail companies that opt for the agreements, the current franchise agreement’s financial mechanisms will initially be suspended for six months.

It can later be further extended or cancelled earlier, based on the agreements.

This move will make sure that the rail services continue to operate to provide means of transport for essential workers and to make sure that the service starts running after the crisis normalises in the future.

In a statement, Shapps said: “In the longer term, these agreements will also minimise disruption to the rail sector. The railways have already seen up to a 70% drop in passenger numbers, with rail fares revenue reducing as people increasingly work from home and adopt social distancing, and total ticket sales down by two-thirds from the equivalent date in 2019.

“Suspending the usual financial mechanisms will not only guarantee that services can be sustained over this difficult period, but it will also provide certainty for staff working on the railways, many of whom are working hard every day in difficult conditions to make sure we keep the railway running.”

Shapps added that the fees will be up to 2% of the cost base before the beginning of the Covid-19 pandemic.

This is expected to incentivise operators to meet their reliability, punctuality and other targets.

If an operator does not opt for Emergency Measures Agreement, the Operator of Last Resort of the Government can step in.

Passengers who have pre-booked their ticket and do not wish to travel can also refund the ticket with no additional charge.

Related Companies

Free Report
img

Navigate your business through the ‘new normal’

COVID-19 continues to dominate headlines the world over. It has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities.  Faced with an explosion of conflicting information on how to plan and implement successful recovery strategies, decision-makers are in dire need of a single, reliable source of intelligence.   GlobalData’s COVID-19 Executive Briefing gives you access to unparalleled data and insights to successfully navigate the uncertain road to recovery across the world’s largest industries. Understand every aspect of this disruptive theme by delving into: 
  •  COVID-19 infection update, with statistics on the spread, testing by country, as well as the latest data on vaccines and therapeutic developments 
  • Economic impact overview, covering stock market indices, GDP, unemployment rates, policy responses & GlobalData’s economic recovery scorecards 
  • Sector developments, with access to sector insight summaries, cross-sector indices and the leaders and laggards in each industry vertical 
Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today. 
by GlobalData
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The railway industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU