Coronavirus: Rail franchise agreements suspended to avoid company collapses | UK News

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The Government has brought in emergency measures to provide refunds to ticket holders and prevent rail companies from collapsing due to the COVID-19 pandemic.

Department for Transport said it will suspend normal rail franchise agreements and take over all the risks as well as revenues for operating trains for at least 6 months.

Restrictions placed around travel over the COVID-19 outbreak has seen a sharp fall in demand for rail companies leaving operators facing significant drops in their income

The Government has also said anyone holding an advance ticket will be able to obtain a refund free of charge.

Season ticket holders will also be able to claim refunds on the portion of time still unused through their rail operators.

The Transport Department said it will continue to run trains on low frequency to allow key workers to commute to work but reiterated government advice for the general public to stay at home and avoid the spread of coronavirus.

Secretary of State for Transport Grant Shapps said: “We are taking this action to protect the key workers who depend on our railways to carry on their vital roles, the hardworking commuters who have radically altered their lives to combat the spread of coronavirus, and the frontline rail staff who are keeping the country moving.

“We are also helping passengers get refunds on advance tickets to ensure no-one is unfairly out of pocket for doing the right thing.

The railways have already seen up to a 70% drop in passenger numbers as an increasing number of people work from home and adopt social distancing.

The government said operators will continue to run day-to-day services for a maximum of 2% of the cost base of the franchise but warned that it will be far less than their recent profits.

Mr Shapps added: “These offers will give operators the confidence and certainty so they can play their part in the national interest.”

It also said that in case operators choose not to take part in its “Emergency Measures Agreement”, the Government’s Operator of Last Resort will take over the franchise.

The government is concerned that if operators were allowed to go bankrupt, it would cause significantly more disruption to passengers and higher costs to the taxpayer in the future.

Paul Plummer, Chief Executive of the Rail Delivery Group, which represents train operators and Network Rail, said: “The industry strongly welcomes the Department for Transport’s offer of temporary support and while we need to finalise the details, this will ensure that train companies can focus all their efforts on delivering a vital service at a time of national need.

“The rail industry is working together so that people and goods can keep making essential journeys during this unprecedented national challenge, getting key workers to hospitals, food to shops and fuel to power stations.”

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