Transport for London (TfL) obtained a government bailout of £ 1.6 billion after the coronavirus pandemic which cut its revenues by 90%. However, the terms of the deal could mean that Londoners would pay a heavy price after the lockout was lifted.
A source close to his office said fares are expected to rise under the terms of the deal, Sky News said.
The new deal will also see government officials joining TfL’s board of directors, reports said.
The settlement came into being just days after TfL announced the loss of £ 4 billion.
The settlement of £ 505 million will take the form of a loan.
Home stay orders saw the number of TfL passengers plummet during the COVID-19 epidemic.
The transportation authority has authorized 7,000 workers to access government money to subsidize their wages and save money.
Despite the shutdown of 300 construction projects, its costs are still running at £ 600 million a month.
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It is unclear whether rate increases would be higher or lower than the rate of inflation.
All details should be confirmed to the City this morning.
The news comes after London Mayor Sadiq Khan warned that TFL staff could be hit hard if the government does not agree to a grant.
The mayor of London admitted that he was concerned about the potential disruption and the lack of money from TFL to manage the services before an agreement was reached.
Speaking to LBC, Mayor Khan previously said, “We spend £ 600 million a month on services and get very little or nothing from our customers, so we do have some liquidity reserve north of £ 2.1 billion, it’s running out.
“We are required by law to keep two months of cash in reserve to pay for services. So we have been involved in weeks and weeks of negotiations with the government and it is very difficult to get support from it.
“To be frank, today is the last day. Unless the government confirms the subsidy we need, the consequences would be quite serious.
“The ramifications for all of us would be enormous, so I hope the government accepts a grant today for TfL to help us.
If they don’t, I worry about the consequences in the future. “
When asked to explain the consequences that TfL users could see, Khan said the lack of money could force the transportation system to further cut services.
Khan said, “Because we cannot go bankrupt, we need to make sure we have the money to pay for the services. The only way to balance the books is to cut services.
“Ironically, when the government wanted us to increase services, increase services, to get into the recovery phase, we may have to cut services because the government has not provided the support we so desperately need need. “