LONDON (Reuters) -Britain said it will bring TransPennine Express under temporary government control after ending its contract to operate trains in the north of England and Scotland, citing months of disruption and regular cancellations across the network.
The government intends to return the FirstGroup-owned company to the private sector, Britain's transport department said on Thursday.
"This is not a silver bullet and will not instantaneously fix a number of challenges being faced, including (workers' union) ASLEF’s actions which are preventing Transpennine Express from being able to run a full service," transport minister Mark Harper said in a statement.
FirstGroup shares slipped 6% by 0852 GMT, heading for their worst day since November and underperforming Britain's wider midcap index which was up 0.1%.
The decision, which follows a similar move to seize control of Go-Ahead Group (LON:GOG)'s Southeastern rail contract in 2021, is the latest problem to beset Britain's franchising model that was used to run the railways after privatisation in the mid-1990s.
ASLEF, which along with other rail unions has staged several rounds of strikes over the past year in demand of higher pay, said Harper had "done the right thing" by cancelling the contract. But the union said it was disappointed he was blaming ASLEF rather than the company’s management for its problems.
The decision to not renew the contract with TransPennine will bring the company into the government's "operator of last resort" control from May 28, the statement added.
FirstGroup said it was disappointed that the contract was not extended given the "investment and improvements we have made to the service over the years".
The government acknowledged some improvements had been made over the past few months but said relationships between the operator, staff, trade unions and passengers had to be reset.