FirstGroup reaches TPE deal with DfT

FirstGroup has reached agreement with the Department for Transport on the termination fee payable for the TransPennine Express franchise.

The transport operator will contribute c£6 million, and the DfT has extended the Emergency Recovery Measures Agreement (ERMA) until 19 September 2021. It is the last of FirstGroup’s franchises to have a termination fee agreed. It is now seeking to agree directly awarded National Rail Contracts for TPE, South Western Railway and West Coast Partnership. These will start by the end of the respective ERMAs, which pre-existing franchise agreements will terminate.

The ERMA for SWR runs until the end of May and that for WCP until March 2022, although the DfT can extend each by a further six months. FirstGroup says that indications from the DfT are that the new contracts will run to the end of May 2023 for TPE and SWR (with potential two-year extension periods) and up to 31 March 2032 for WCP. Great Western Railway’s direct award runs until April 2023 and there is no termination sum on this franchise as the contract was entered into after the transition to ERMAs.