French to bid for East Coast rail route

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THE STATE-OWNED French rail company SNCF has registered its intention to bid for one of Britain's most lucrative train franchise, according to industry sources.

The East Coast mainline yields revenues of around pounds 300m a year and is one of the most profitable routes currently on offer from the Shadow Strategic Rail Authority. SNCF will be in competition for the route with three other bidders, including Great North Eastern Railways, a subsidiary of James Sherwood's Sea Containers, which operates the route at present.

GNER's seven-year franchise expires in 2003. It is due to be re-let early next year on a 20-year franchise.

Other bidders include Virgin Trains, which already runs services on the West Coast route and Cross Country Trains, and GB Rail which operates services in East Anglia.

The East Coast route is in the first batch of franchises to be re-let. The Government is proposing to offer longer franchises in return for much bigger investment in the rail network by train operating companies. It is understood that GB Rail, Stagecoach and National Express have also lodged competing outline bids for the franchises currently owned by Chiltern Railways and Connex South Central.

Stagecoach presently owns 49 per cent of Virgin Trains, South West Trains and the line running on the Isle of Wight. National Express owns Midland Mainline, Central Trains, Silverlink, Gatwick Express and ScotRail. Unnamed groups from outside the industry have also contacted the SSRA to see if they qualify to take over franchises. The potential bidders are expecting to hear before Christmas if their names will go forward for the formal bidding process. The authority has set aside a 60-day period to hearfinal presentations and is expected to announce the successful bidders next summer.

News of the French interest in the East Coast mainline came as Virgin Trains gave further details of its bid, promising to cut 40 minutes from the London-Edinburgh journey time and invest pounds 3.2bn in the service. The centrepiece of the investment programme will be a fleet of up to 37 new Pendolino tilting trains costing pounds 600m. Virgin intends to buy 25 electric Pendolinos, 12 diesel high speed trains and a further two "hybrid" trains.

Will Whitehorn, corporate affairs director of the Virgin Group, said the company had learned to deal with Railtrack after prolonged negotiations over the signalling system for the West Coast route. "We would like to apply these lessons to the East Coast line. We hope we will be given a chance and that we will be allowed to compete for the franchise," Mr Whitehorn said.

Virgin Trains is already purchasing a fleet of 53 Pendolinos for the West Coast route. The trains, which will enter service in 2002, will initially travel at 125mph but their speed will be increased to 140mph by 2005, reducing the journey time between London and Birmingham from its present one hour and 35 minutes to one hour and 10 minutes.

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