Financial unravelling of GNER franchise

Sea Containers press release (13 pages, PDF) providing details of GNER's underperformance of financial expectations, and of the performance bond and financial support arrangements mandated by GNER's franchise agreement with the Department for Transport. The performance bond is due to rise from £15.3 million to £28.7 million in May 2007 unless the contract is renegotiated or abandoned before then. Another £40 million of undrawn credit facilities is currently provided or guaranteed by Sea Containers to GNER but there does not appear to be a mechanism for GNER or the Department to draw these additional funds in the event of a default.

For further information or advice please contact Franck Latrémolière.

Filed under DfT, ECML, Public transport.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon