Go-Ahead defends rail profits after government bailout

image copyrightGo-Ahead
image captionThe RMT union said risks had been nationalised but profits remained privatised

Transport company Go-Ahead has defended its multimillion-pound rail profits despite the industry benefiting from a £10bn government bailout.

The Newcastle-based company, which runs Southeastern and Govia Thameslink, recorded a rail operating profit of £6.5m for the second half of 2020.

Chief executive David Brown said its services were "an absolute bargain" for taxpayers.

But RMT general secretary Mick Cash said the profit was "beyond belief".

"The government have effectively nationalised all of the risks on our railways but profits and dividends remain privatised," he said.

"It's beyond belief that despite the pandemic these private train companies are still extracting fat profits and dividends out of the rail network, while staff at the front line are confronted with threats of a pay freeze and attacks on jobs, pensions and conditions."

image copyrightGo-Ahead
image captionPassenger numbers reduced significantly during lockdown

The government took over franchise operators' financial liabilities in March 2020 as the coronavirus pandemic cut demand for services.

The package is expected to cost taxpayers about £10bn by mid-2021, but Mr Brown said he could "quite easily" defend Go-Ahead's profits.

"They're paying us to be an efficient operator and to run a service according to their specification for which we receive a management fee," he said.

"Why would we do it otherwise? You will not get that cheaper through a nationalised industry. This is an absolute bargain."

Go-Ahead recorded an overall pre-tax profit of £24.6m for the six months to 2 January, down from £49m the previous year.

It said it intended to pay shareholders a dividend "at an appropriate level".

Demand for the firm's bus services outside London reduced to 40% of normal levels in November after the second national lockdown was introduced.

Mr Brown said the company expected to see an increase in passengers "as the economy opens throughout the spring".

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