LONDON (dpa-AFX) - Go-Ahead Group Plc. (GOG.L) Monday announced that its 65 percent owned subsidiary Govia has received a Direct Award Contract from the Department for Transport or DfT to continue operating the Southeastern franchise.
The new contract commences on April 1 and will run until October 16, 2021, with the option to extend at the DfT's discretion until 31 March 2022.
Govia, which is 35 percent owned by Keolis, has operated Southeastern since 2006.
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 March 23, removing exposure to changes in passenger demand and costs.
The management fee will be set at a maximum of 2 percent of Southeastern's cost base before the pandemic began.
The company noted that 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.
Go-Ahead said 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.
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