Rail company fined £23.5m for ‘undermining public trust’ Business News

A leading rail operator has been fined £23.5million following the discovery that it had ‘deliberately concealed’ more than £25million of taxpayer funding.

London & South Eastern Railway (LSER), part of Govia, was stripped of the south eastern rail franchise in September 2021.

Its train network linking Kent, East Sussex and south-east London to the center of the capital is now run by the government.

The Department for Transport (DfT) found that “between October 2014 and March 2020, the LSER deliberately concealed over £25m of historic taxpayer funding” which should have been returned.

The money was linked to High Speed ​​Rail Link 1, on which Southeastern operates Javelin fast trains between London St Pancras and towns in North and East Kent.

Transport Secretary Grant Shapps said: ‘I have taken decisive action and have not renewed the contract with Southeastern following this appalling breach of trust.

“Our swift and firm action has protected taxpayers and passengers – ensuring essential services continue to operate.

“The LSER’s behavior was simply unacceptable and this sanction sends a clear message that the government and taxpayers will not tolerate it.”

The DfT says it is recovering £64 million belonging to LSER “in relation to breaches of the franchise agreement described in the penalty notice”.

The Go Ahead group owns 65% of Govia; the French company Keolis owns the rest. Go Ahead Group issued a statement confirming the sanction “with respect to good faith violations of LSER franchise agreements”.

The company had already set aside £30m “as a possible financial penalty from the DfT in relation to the LSER”.

Govia also operates the UK’s busiest rail franchise, Govia Thameslink Railway, which includes Thameslink, Great Northern and Southern.

Southeastern joined Northern and LNER in public ownership.

It serves more than 180 stations with 12,800 trains per week and has more than 4,000 employees.

Before the coronavirus pandemic, the company carried 640,000 passengers each weekday.

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This notice was published: 2022-03-17 07:56:36

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