GTR’s Emergency Recovery Measures Agreement Extended

The UK Department for Transport (DfT) has extended GTR’s Emergency Recovery Measures Agreement (ERMA) until 31 March 2022; it was previously due to end 20 September 2021.

There has been no change to its terms and conditions.

Two passengers on Thameslink train
Two passengers on a Thameslink train

Around 90 percent of the group’s revenue is generated by contracts where there is no direct risk from fluctuations in passenger demand. The ERMA also has no financial exposure to passenger volumes.

Patrick Verwer, GTR CEO, said:

“We welcome this announcement. Everyone at GTR is focusing on providing a safe and reliable service to customers as they continue to come back to their rail services over the next few months. We are working in collaboration with the DfT, the industry and our stakeholders to reconnect people and communities, improve performance and meet the needs of all our customers.”

ERMAs replaced the Emergency Measures Agreements (EMAs) put in place in March 2020 when the UK government suspended rail franchise agreements last September. They have tougher performance targets and lower management fees than their predecessor – 1.5 percent, down from the original two percent.

The government has declared it wishes to replace franchising with a “simpler, effective model”. The new approach will follow the EMAs and ERMAs and be a concession-based model. This means operators will receive a fixed fee for running services as well as flexible bonuses depending on their performance. These changes were announced in the Williams-Shapps Plan for Rail. The franchising model was struggling even before the pandemic hit, but the almost complete collapse in passenger numbers starting in March 2020 marked the nail in the coffin for it.

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