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FirstGroup agrees new national contracts for South Western Railway, TransPennine Express
StockMarketWire.com
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Bus and rail company FirstGroup said it had agreed new national contracts with the Department for Transport for its South Western Railway and TransPennine Express train operating companies.
The new contracts - set to begin on 30 May 2021, when the current Emergency Recovery Measures Agreements come to an end - had a two-year term to May 2023 with options to extend by up to two further years to May 2025.
Under the new contracts, the Department for Transport would 'retain all revenue risk and substantially all cost risk,' the companys aid.
For the group's 70% share of the First MTR joint venture for South Western Railway the fixed management fee was £3.3 million per annum, with an opportunity to earn an additional fee of up to £9.9m, which was the maximum attainable performance fee.
For TransPennine Express, the fixed management fee was £2.3 million per annum, with an opportunity to earn an additional fee of up to £5.2 million, the maximum attainable performance fee.
'The National Rail Contracts agreed for SWR and TPE leave us well-placed for lower risk, cash generative rail operations on those two networks,' the company said.
Story provided by StockMarketWire.com
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