Go-Ahead Group PLC and partner Keolis have been stripped of the contract to run the Southeastern rail franchise after being accused of a serious breach of its "good faith" obligation by the Department of Transport (DfT).
LSER, the Go-Ahead/Keolis consortium running the franchise, did not declare £25mln of taxpayer money amounting to a significant breach of the agreement and undermining trust said the DfT.
Further investigations are underway into all historic contracts with LSER the Transport Department added.
Grant Shapps, Transport Secretary, said:” There is clear, compelling and serious evidence that LSER have breached the trust that is absolutely fundamental to the success of our railways. When trust is broken, we will act decisively.
“The decision to take control of services makes unequivocally clear that we will not accept anything less from the private sector than a total commitment to their passengers and absolute transparency with taxpayer support.”
An Operator of Last Resort (OLR) will take over Southeastern passenger services on 18 October 2021 when the existing agreement expires, Go-Ahead said in a statement.
“While the group is naturally disappointed by this, the decision relates only to Southeastern. Our other rail business, GTR, is not affected,” it added.
Go-Ahead has again postponed its annual results, which were due on Thursday, having already delayed them once due to the situation regarding Southeastern.
The £25mln referred to in the DfT's statement this morning had been repaid it added with a detailed update on further liabilities to be included in the full-year results.
Chair, Clare Hollingsworth, said: "It has always been this group's intention to provide the best possible public transport, and to work in partnership with the Government and related agencies.
“We recognise that mistakes have been made and we sincerely apologise to the DfT. We are working constructively with the DfT towards a settlement of this matter."
Go-Ahead’s Group Chief Financial Officer Elodie Brian has resigned and will be standing down from the board with immediate effect, the statement added.
Gordon Boyd has agreed to join as Interim CFO with immediate effect. He previously held senior financial roles within Drax, Infinis PLC and Capita PLC (LSE:CPI).