Southeastern Direct Award Contract

The Go-Ahead Group today announces that the Department for Transport (DfT) has awarded a Direct Award Contract to Govia to continue operating the Southeastern franchise.  The new contract commences on 1 April 2020 and will run until 16 October 2021, with the option to extend at the DfT’s discretion until 31 March 2022.

Under its existing contractual terms, Southeastern’s revenue is largely generated by passenger fares. The new arrangement is a management contract, reflecting the DfT’s response to the COVID-19 pandemic announced on 23 March 2020, removing exposure to changes in passenger demand and costs. The management fee will be set at a maximum of 2 per cent of Southeastern’s cost base before the pandemic began.  

Approximately 90% of total Group revenues are now derived from contracted markets where there is no direct revenue risk from changes in underlying travel demand.

Southeastern will continue its immediate focus on providing services for key workers in this time of national crisis. Looking further ahead, during the course of the contract term Southeastern will deliver a range of customer experience improvements including exploring options to boost capacity as additional rolling stock becomes available, and continued partnership with Network Rail to develop a longer-term capacity, rolling stock and punctuality strategy for the Southeastern network beyond 2022.

Go-Ahead’s subsidiary, Govia (Go-Ahead 65%, Keolis 35%), has operated Southeastern since 2006. Punctuality on Southeastern has increased by nearly 10% in the last two years, and customer satisfaction hit a six year high (81%) in the most recent National Rail Passenger Survey.

David Brown, Go-Ahead CEO, commented:

“This new contract provides continuity and stability during a challenging time.  The immediate priority remains the health and wellbeing of colleagues and customers, and to support society by providing an essential service for key workers.”

David Statham, Southeastern Managing Director, said:

“We continue to work with our industry partners to ensure that services are available to get people working in healthcare, food and other vital public services where they need to be.  When customers are able to begin travelling as normal, we look forward to reconnecting our communities and further improving capacity, performance and customer satisfaction.”