London transport operator secures $2 billion emergency government funding

London's transport operator, which has seen passenger numbers collapse due to coronavirus, said it had secured 1.6 billion pounds ($2 billion) in government funding to cover a shortfall in revenue until October.

Transport for London (TfL), which runs the city's red double-decker buses and underground Tube trains among other services, said it had lost more than 90% of its revenue from fares and advertising on its network since lockdown. Measures imposed in March have restricted people's movements with businesses shut and many people working from home.

TfL said demand had declined steeply, with journeys on London Underground down 95% and on London buses down 85%. London's Transport Commissioner Mike Brown said the support package would help to get London moving and working again, safely, and sustainably.

"We have been operating up to 70% of peak Tube services and over 80% of bus services with many of our staff ill, shielding or in self-isolation," he said. "From next week we will further increase services beyond this as we progressively build towards restoring services to pre-covid levels."

The deal, which includes a 505-million pound loan, will see TfL resume a full underground train service as soon as possible and allows for above-inflation fare rises in future, the BBC reported. The Evening Standard newspaper said another condition of the financing deal is that government officials will sit on the transport operator's board meetings and that regular financial reports will be sent to the Department for Transport.

TfL said given the uncertainties in predicting demand if the shortfall was greater or less than 1.6 billion pounds, the grant, and the loan would increase or decrease proportionately, up to a maximum of 1.9 billion pounds in total. Mayor Sadiq Khan, who belongs to the opposition Labour Party, had warned earlier that if a deal was not struck on Thursday, services would have to be reduced.

"Because we are required to keep two months' worth of money to pay for services, we'll have to start reducing services," he told LBC radio. ($1 = 0.8205 pounds)

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