Go-Ahead announces revised rail contract in Norway
The Go-Ahead Group have announced that, following months of discussions, a new agreement has been reached regarding its rail contract in Norway
Credit: Go-Ahead Group
The Go-Ahead Group has announced that, following discussions over a number of months, a new agreement has been reached between the Norwegian Railway Directorate and Go-Ahead Norway A/S, regarding the structure of its rail contract.
Under the original contract, which began in December 2019, the revenue risk associated with changes in passenger demand rested with Go-Ahead. During the COVID-19 pandemic, the Norwegian Government provided financial support to rail operators, preventing material losses.
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The amended contract takes effect from 1 July 2022 and runs for the duration of the original contract, until December 2027 (plus a two-year extension option until December 2029). The contract provides a revenue support scheme until the end of the contract. The amended contract also includes an incentive scheme linked to revenue growth. As a result of these improved contractual arrangements, the Group expects to significantly reduce the £66.2 million onerous contract provision relating to its rail operation in Norway in its full year results for the year ending 2 July 2022.
“We’re pleased to have reached an agreement with the Norwegian Government which puts our rail contract onto a satisfactory footing,” Christian Schreyer, Group Chief Executive for the Go-Ahead Group, said. “We’re proud of our colleagues at Go-Ahead Nordic who deliver an outstanding service and who have achieved the best customer satisfaction ratings on Norway’s railway network.”