THE FRANCHISE owners of South Western Railway have said that their contract could be terminated within the next 12 months after announcing massive losses.

The franchise is run by First MTR South Western Trains Ltd, whose accounts showed a post-tax loss of £136.9m, for the year ending March 31, 2019.

This has led to Kevin Gardner, Director, to conclude that there is “material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern, and that the company may be unable to realise its assets and discharge its liabilities”.

He also says that the company are in discussions with the Department for Transport about remedying the situation, saying that they could cancel their contract in the next 12 months, seeing the SWR network transferred to a publicly-owned operator.

Mr Gardner adds: “The directors have a reasonable expectation that the discussions with the DfT will have a positive conclusion, and that the company will continue to operate for the foreseeable future.”

The RMT have also called for SWR to be stripped of their franchise after seeing the report.

General Secretary, Mick Cash, said: “Rather than allowing South Western Railway to collapse into chaos RMT is demanding that the existing operator is stripped of the franchise with the public sector taking over as soon as possible. The alternative is Britain’s biggest rail franchise crashing into the buffers with dire consequences for passengers and staff alike.

“This comes the day after the new Managing Director of SWR, Mark Hopwood, openly threatened to sack hundreds of RMT guards and hire in a new army of staff who will bend to his demands on compromising safety.

“Instead of threatening our members the SWR company should be packing their things, clearing their desks and making way for a public operator putting safety and services first.”

It comes after a difficult two-and-a-half years for the operator since taking over the service, which has seen a number of period of strikes, including a walkout lasting 27 days last month by the RMT.

The alternative outcome of the talks with the DfT could see SWR asked to submit proposals that would see it continue operation for a short period of time.

A spokesperson for SWR said: “SWR’s recent performance has been affected by issues including infrastructure reliability, timetabling delays and industrial action.

“We continue to be in ongoing and constructive discussions with the DfT regarding potential commercial and contractual remedies for the franchise and what happens next, in order to ensure we reach the right outcome for the Government, our shareholders and our customers.

“As set out previously, FirstGroup and MTR have already provided for the maximum unavoidable loss.”