(Recasts, adds detail, background)
LONDON, Sept 21 (Reuters) - Britain extended emergency
pandemic funding to keep its rail network moving, providing
private train companies with less lucrative temporary contracts
ahead of a shake-up of the way the system operates.
The government did not go as far as a full nationalisation -
as had been speculated by some media outlets - but said it
wanted to run trains based on a new model once the impact of
COVID-19 becomes clear.
Britain said it would now pay the companies management fees
of a maximum of 1.5% of the cost base of the contract
pre-pandemic, lower than the around 2% fee included in the
initial emergency contracts issued at the outbreak of the
pandemic.
UK train companies Go-Ahead and FirstGroup
said they had signed new contracts with the government on Monday
for a year and 6-18 months respectively.
Passenger numbers dropped by as much as 90% at the height of
the pandemic as public transport was reserved for key workers.
While numbers have risen in recent weeks, there are fears they
could fall again as the virus accelerates.
Britain said that the pre-pandemic franchising system for
the rail network, which was heavily criticised and failed for a
number of operators, would not be brought back.
"The model of privatisation adopted 25 years ago has seen
significant rises in passenger numbers, but this pandemic has
proven that it is no longer working," Transport minister Grant
Shapps said in a statement on Monday.
When the course of the pandemic becomes clearer, the
government said it would publish details of how railway
contracts will operate under the new system, but until then
taxpayers will need to fund the railway, it said.
(Reporting by Sarah Young; editing by Kate Holton)