UK govt in GBP1.6B bailout of London transport system

LONDON (AFP) – The British government will pump GBP1.6 billion into London’s public transport system to restore services and help prevent overcrowding as people return to work, operator Transport for London (TfL) said yesterday.

London Mayor Sadiq Khan is now expected to restore full bus and train services, having warned they would be cut further without emergency state support, owing to the coronavirus epidemic.

But he criticised the government, which will obtain control for the period of the bailout, because of likely fare increases to offset losses incurred during the lockdown. He accused the Department for Transport of “making ordinary Londoners pay the cost for doing the right thing on COVID-19”.

TfL informed the London Stock Exchange yesterday that “an extraordinary funding and financing support package has been agreed between TfL and the Department for Transport to contribute towards TfL’s forecast funding shortfall.

“The funding package is based on the assumption that the funding shortfall will be GBP1.6 billon for the period 1 April 2020 to 17 October 2020.”

TfL has seen a 90-per cent drop in revenue from ticket sales during the seven-week coronavirus lockdown as passenger numbers slumped.

It has been paying the GBP600 million monthly operating bill from cash reserves but said the situation was no longer sustainable.

Khan on Thursday warned that without government funding, bus and Tube services would have to be cut to save money, as TfL tried to balance its books.