(Alliance News) - Go-Ahead Group PLC on Tuesday said it has reached a new agreement with the Norwegian Railway Directorate, putting its rail contract on "satisfactory footing".
The public transport operator expects to "significantly" reduce the GBP66.2 million onerous contract provision relating to its Norway rail operation in its financial year ending on Saturday.
The firm said the terms of the contract have been improved.
"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," it explained.
Under the original contract, which began in December 2019, the revenue risk associated with changes in passenger demand rested with Go-Ahead. During the pandemic, the Norwegian government provided financial support to rail operators.
The amended contract will take effect from July 1 and will run until December 2027, with a two-year extension option until December 2029.
"We're pleased to have reached an agreement with the Norwegian government which puts our rail contract onto a satisfactory footing," said Chief Executive Christian Schreyer.
Shares in Go-Ahead closed down 1.1% at 1,590.00 pence in London on Tuesday.
By Lucy Heming; lucyheming@alliancenews.com
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