FIRST RAIL Managing Director Steve Montgomery has told Modern Railways the company remains committed to addressing the challenges facing the SWR franchise, amid rumours of a takeover by the Operator of Last Resort.

SWR, which First operates in a joint venture with MTR, has been particularly affected by the Central London Employment (CLE) mechanism, on which future financial targets are based, and FirstGroup has made a £145.9 million onerous contract provision against the franchise. SWR has also faced a series of strikes by the RMT union concerning the method of operation of the new Class 701 trains.

‘We’re working very closely with everybody to try to get through this difficult stage’ said Mr Montgomery. ‘We’ve been badly affected by strikes over the last two years and clearly that’s damaging the business. Customer confidence is gone, and we’ve got to do an awful lot of work to rebuild that again. We and MTR are committed to try and continue to get that service back again, but we need Network Rail in a partnership to make sure we get the service running the way it should be. At the moment it isn’t good enough, we get that, and we accept it.’

Concerning the financial aspects of the franchise and the CLE measure, Mr Montgomery said talks are ongoing. ‘Under the Central London Employment measure it’s not working the way we think it should work, we’ve put this to the Department but it has said that this is the model that’s been there for years’ he said. ‘So we continue to talk to them about it to try to understand if there’s any way that we can do this.