The ScotRail train franchise will be run by the Scottish Government as an “operator of last resort” when the current contract with Dutch firm Abellio ends in March 2022.

Transport Secretary Michael Matheson told the Scottish Parliament he had ruled out extending the existing contract with the Dutch rail operator because “the current franchising system is no longer fit for purpose.”

Matheson said ScotRail services will be provided by an “arm’s length company” that will be owned and controlled by the Scottish Government.

On Twitter, ScotRail said: “The Scottish Government today confirmed that when the Abellio ScotRail franchise ends on 31 March 2022, a new public sector body will begin running ScotRail.

“It’ll be known as the operator of last resort (OLR) …

“Since Abellio was awarded the franchise in 2015, we’ve invested £475 million in new and upgraded trains and transformed Scotland’s Railway.

“Recently, we’ve also been delivering sustained high punctuality, in particular during the pandemic.

“Our customer satisfaction scores are a testament to the hard work of our 5,200 highly-skilled staff.

“Throughout the pandemic, we’ve provided a vital service working closely with partners across the railway and in government.

“We’re proud of our role in such challenging times.”

Matheson said: “With the current ScotRail franchise expected to end in March 2022, we need to take decisions about successor arrangements within the current legislative framework …

“I have decided that it would not be appropriate to award a franchise agreement to any party at this time, either through a competition or a direct award.

“That is why I have confirmed that, from the expiry of the current franchise, ScotRail services will be provided in public hands through a company wholly owned and controlled by the Scottish Government.

“This is in line with our operator of last resort duty.

“ScotRail staff will transfer to the new Scottish Government-owned entity, with their terms and conditions protected.

“This approach will provide a stable platform for ScotRail services and certainty for passengers and staff.”