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FirstGroup : UK Extends Emergency Measures Agreement For Great Western Railway

FirstGroup plc. (FGROY.PK,FGROF.PK,FGP.L) said Tuesday that the U.K.'s Department for Transport or 'DfT' has exercised its option to extend the Emergency Measures Agreement or 'EMA' for Great Western Railway or 'GWR' until at least 26 June 2021.

The company said in March that it had signed an agreement with the DfT to continue operating GWR until March 2023, with a possible one-year extension.

The company also announced in March that the franchise would run under EMA terms for at least the first six months in response to the coronavirus outbreak. That time period is now expiring and therefore the DfT has exercised its option for the EMA to continue under the same terms and conditions as previously.

As per the Emergency Measures Agreement, the Transport department waive the company's revenue, cost and contingent capital risk and GWR are paid a fixed management fee with the potential for a small performance-based fee.

The Transport department has an option to further extend the EMA, before the end of the EMA period in June 2021.

GWR also has the right to revert to operating with revenue risk but with protection provided though the Forecast Revenue Mechanism until at least 2023. The franchise agreement also makes provision to agree a revenue rebasing which would apply at the end of the EMA term.

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