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Go-Ahead to pay cash to Treasury

The rail arm of Go-Ahead will start contributing cash to the Treasury this spring after revenues jumped on its commuter routes.

The London Midland route into Euston has been eligible for government subsidies since November, but Go-Ahead said that a 12 per cent increase in passenger journeys during the last six months of 2011 meant that its rail arm will become a net contributor to the taxman from April.

Southeastern, the route across London, Kent and East Sussex that Go-Ahead runs as a joint venture with France's Keolis, is still receiving 80 per cent revenue support from the Department of Transport.

Overall, the group's revenues for the six months to the end of December rose by almost 6 per cent to £1.2bn, mainly due to a 5 per cent increase in bus passengers outside London and 9.6 per cent rise in demand for its train tickets.

The next six months will see decisions made on the UK's rail market franchising, on which Newcastle-based Go-Ahead is working with Keolis to bid for the Thameslink and Essex Thameside routes.