South Western Railway will be the first train operator nationalised under the Labour government, ministers are expected to announce this week.
One of the UK’s biggest commuter services, which operates out of London Waterloo, it will be taken into public hands in May.
SWR is run as a joint venture between First Group and MTR, the Hong Kong rail operator.
The decision will spell a more cautious timeline for renationalisation under new transport secretary Heidi Alexander than envisaged by her predecessor, Louise Haigh, who resigned last week.
SWR will be the first to be brought under the control of the Department for Transport’s operator of last resort, DOHL, when its contract ends in May, as first reported by the Financial Times.
All operators will eventually be nationalised under the provisions of the public ownership bill championed by Haigh, which became law last week.
Haigh had, however, been mulling exercising break clauses in other contracts that could have seen Greater Anglia renationalised earlier.
Other train operators under public control had previously only had contracts terminated after clear financial or operating breaches.
LNER has been run by DOHL since the Virgin East Coast franchise collapsed in 2018, while Northern, Southeastern and TransPennine followed under the Conservative government.
Passenger trains are expected to run under the Great British Railways banner when government plans for an integrated railway come into effect.
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South Western recently reported an operating profit of £12.2m for the last financial year, on the back of a £140.9m subsidy from the DfT. It had once been among the most profitable franchises, making net payments to government, before Covid accelerated the fall in daily commuting into the capital and the collapse of season ticket sales.
MTR’s contract to run the Elizabeth Line trains expires in May, when it will be succeeded by a Tokyo Metro and Go-Ahead joint venture.