Welsh rail services will be nationalised from February following a significant drop in passenger numbers and revenue seen during the Covid-19 pandemic, the country’s Transport Minister Ken Skates has confirmed.

Day to day operation of services under the Wales & Borders franchise will be handed to a new publicly owned subsidiary of Transport for Wales, following an agreement with current operator KeolisAmey.

The agreement came as Wales entered a two week ‘firebreak’ lockdown due to the resurgence of Coronavirus, and follows recent Department for Transport changes to the franchise model in England.

Ken Skates said in a written statement that the move allows the Welsh Government to have an “even greater role in the delivery of services in Wales and the Borders, reflective of the new commercial realities of the post Covid-19 environment”.

He added: “With huge uncertainty over passenger revenue, this provides us with the most stable financial base to manage rail services as we emerge from the pandemic.”

Details of the new financing and operational model will be finalised in the coming months and it is not yet clear whether nationalising services represents an interim or permanent measure.

The agreement between Transport for Wales and KeolisAmey also ensures that the latter will continue to deliver a programme to transform the Welsh Core Valley Lines network and support other key projects including the South Wales Metro scheme.

Transport for Wales chief executive James Price commented: “There is no doubt that there will be difficult decisions in the future as we adapt to the realities of a post-Covid era, but this agreement will give us a stable base from which to build back better.”

KeolisAmey Wales chief executive Kevin Thomas said: “In light of Covid-19, we recognise the need for Welsh Government to have a sustainable way forward for delivering its ambitious objectives for rail and we are pleased to have agreed and put in place robust principles as we work on the details of a new agreement.”

Rail franchise agreements in England were suspended by the DfT under emergency measures to protect train operators in March.

Ministers then announced the end of rail franchising in September, with operators being moved onto transitional contracts known as Emergency Recovery Measures Agreements with tougher performance targets and lower management fees.

These are designed to address the continuing impact of the pandemic on the railway and pave the way for wider rail reforms which are expected after the long awaited Williams Rail Review publishes.

(Photograph: Anamyd and licensed for reuse under this Creative Commons Licence)