South Western Railway could lose franchise after £137m loss following strikes

It follows 27 days of strikes in December for the train firm

File image of South Western Railway train in London Waterloo station. (PA)

South Western Railway (SWR) has said it could lose its franchise, following losses of £137m.

The train operator, which runs services from London Waterloo, Britain’s busiest station, to Surrey, Hampshire, Berkshire and the South West, has been plagued by strikes over the past year.

A 27-day strike throughout December, in an ongoing row over the role of guards on trains, saw the number of SWR services halved during the month.

It said in a statement that it was in “ongoing and constructive discussions” with the government over the future of the franchise.

SWR, owned by First Group and Hong Kong-based MTR Group, posted a loss of £136.9m after tax in the year to 31 March 2019.

A SWR spokesperson said in a statement: “SWR’s recent performance has been affected by issues including infrastructure reliability, timetabling delays and industrial action. We continue to be in ongoing and constructive discussions with the Department for Transport (DfT) regarding potential commercial and contractual remedies for the franchise and what happens next, in order to ensure we reach the right outcome for the Government, our shareholders and our customers.

“As set out previously, FirstGroup and MTR have already provided for the maximum unavoidable loss.”

The RMT union, which called the December SWR strike, has called for nationalisation of the franchise.

RMT general secretary Mick Cash said: “Rather than allowing South Western Railway to collapse into chaos, RMT is demanding that the existing operator is stripped of the franchise with the public sector taking over as soon as possible.

“The alternative is Britain’s biggest rail franchise crashing into the buffers with dire consequences for passengers and staff alike.”

A spokesperson for the DfT said: “We monitor the financial health of all our franchises closely and we expect them to meet their contractual obligations, but we have clear and robust processes in place to protect services for passengers and taxpayers.

“The Government will shortly bring forward a White Paper containing reforms recommended by the Williams Review that will put passengers first, end the complicated franchising model and simplify fares to create a simpler, more effective system.”

Last week, transport secretary Grant Shapps told the BBC that Northern Rail could be stripped of its franchise because of its “unacceptable” performance.

“I’m simply not prepared for the service on Northern to carry on as it is and I am taking action,” he told BBC Breakfast.

It is “completely unacceptable” for trains to be “routinely” late, he said. “I simply will not put up with that.”