However, FirstBus could run into regulatory problems as it already operates local bus services within the Great Eastern franchise area.
Last night the Office of Fair Trading confirmed it would examine the competition implications of the award. "We will be looking at this in the normal way," said an OFT spokesman.
FirstBus, which also has a 24.5 per cent interest in the Great Western franchise, is promising passengers on the busy commuter line a pounds 9m improvement package. The franchise, lasting seven years and three months, will involve the company refurbishing trains, increasing services, cleaning up stations and raising punctuality targets.
There are also plans to introduce a pilot through-ticketing scheme on buses and trains in Colchester and Chelmsford. However, Trevor Smallwood, FirstBus chairman, refused to rule out job cuts among Great Eastern's 1,400 staff.
FirstBus will receive a subsidy of pounds 29m from taxpayers in the first year of the franchise, compared with the pounds 40.6m given to British Rail in 1996- 1997. But the annual grant will dwindle to nothing in 2001-2, and by 2003-4 FirstBus will actually be paying the Government's rail franchise office pounds 9.5m.