Agreement extended until June 2021

 

 
FirstGroup has announced the Department for Transport has exercised its option to extend the Emergency Measures Agreement (EMA) for Great Western Railway until at least 26 June 2021.

In late March the transport group announced it had signed an agreement with the DfT to continue operating GWR until March 2023, with a possible one-year extension.

At that time, it was also announced that the franchise would run under EMA terms for at least the first six months in response to the coronavirus outbreak.

That time period is now expiring and therefore the DfT has exercised its option for the EMA to continue under the same terms and conditions as previously. Under the EMA, the DfT waive revenue, cost and contingent capital risk and GWR are paid a fixed management fee with the potential for a small performance-based fee.

Before the end of the EMA period in June 2021, the DfT has an option to further extend the EMA. GWR also has the right to revert to operating with revenue risk but with protection provided though the Forecast Revenue Mechanism until at least 2023. The franchise agreement also makes provision to agree a revenue rebasing which would apply at the end of the EMA term.

“We welcome the news of the extension of the EMA for GWR,” said Matthew Gregory, FirstGroup chief executive. “This demonstrates the essential nature of GWR’s services to the communities it serves, and provides important clarity and continuity for our customers, employees and wider stakeholders.”

FirstGroup adds that discussions continue with the DfT about the group’s other rail franchises which are under EMAs until September 20.

 
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