Avanti and CrossCountry, two of the worst rail operators for cancellations and delays, have been awarded long-term contracts to run services on the West Coast and in Scotland.
Avanti, which has been handed the contract to run the West Coast mainline between London, Birmingham, Manchester, Liverpool and Glasgow, was put on six-month notice just a year ago due to its performance.
Transport secretary Mark Harper said today, however, that Avanti was back on track with an average now of just 1.1% of trains cancelled.
Avanti’s new West Coast contract starts on 15 October and runs for a maximum of nine years with a termination clause at any point after three years.
Harper said: "Over the past year, short-term contracts were necessary to rebuild the timetable and reduce cancellations.
"Now Avanti are back on track, providing long-term certainty for both the operator and passengers will best ensure that improvements continue."
Anvanti is a joint venture between FirstGroup PLC (LSE:FGP) (70%) and Trenitalia (30%) .
CrossCountry, owned by Deutsche Bahn subsidiary Arriva, is still struggling with reliability due to disruption by strikes and overtime bans.
According to the BBC, its performance between April and June is among the bottom three of operators
Even so, it has been awarded an eight-year contract starting in October that can be terminated after four years.
CrossCountry's trains run from Aberdeen to Penzance via Birmingham.
Since the pandemic, Britain's rail services have effectively been nationalised with operators running services on fixed payment contracts for the government.
Shares in FirstGroup rose slightly to 157p, and are up by 57% so far this year.
Liberum added that the West Coast contract provides for a fixed annual management fee of £5.1m with an annual variable incentive fee of up to £15.8m. On-target performance would deliver c.65% of the variable fee.
As with other NRCs, the structure is a management contract with the DfT retaining all revenue risk and the bulk of the cost risk.
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