French firm may buy third rail franchise

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The Independent Online
The French-owned transport company CGEA could gain control of the whole former Southern Region of British Rail, one of its senior executives said yesterday at the announcement of its successful bid for South Eastern Trains.

The company, operating under the name Connex, now has control of two of the three main companies making up the old Southern Region, Britain's largest commuting area, as it already runs the Network SouthCentral franchise.

South Eastern covers services to Kent, part of south London and is the neighbouring franchise to Network SouthCentral. The new franchise is for 15 years and involves the purchase of 125 train sets at a cost of pounds 400m, a requirement of the terms of the franchise set by the franchising director, Roger Salmon. The first of the new units will be in service by 1999.

At the launch yesterday, the Connex vice-chairman Antoine Hurel said that if the South West trains franchise - the third part of the old Southern Region - came on the market, "we would bid for it". SWT is now controlled by Stagecoach but the company's bid for one of the rolling stock companies (Roscos), Porterbrook, raises the possibility of the regulatory authorities making it divest the SWT franchise.

Mr Hurel also threw the whole issue of the future of the rolling stock market into further confusion. He said Connex had examined the way in which it would acquire its new trains and "we have decided that, at the moment, the best method is to form our own Rosco".

However, now that the bid for South Eastern trains had been confirmed, Connex would be talking to the Roscos and train manufacturers to see if a better deal emerged. If such a big new order did not go to the existing Roscos, it would put a big question mark over their future existence, once their present leases ran out.

Connex will receive pounds 125.4m in subsidy to run South Eastern, compared with BR's present subsidy of pounds 120.8m. But the amount will tail off over the life of the franchise, at the end of which, in 2011, Connex will make a payment of pounds 2.8m to the franchising director.

South Eastern is not allowed to merge with Network SouthCentral but Mr Hurel said there would be joint use of administrative systems, logos, ticketing services, and branding. All tickets between the two would be interchangeable, he added.

Leading article, page 15

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