Great North Eastern seeks extra decade on franchise

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Great North Eastern Railway, which runs high-speed train services from London to Scotland, is seeking to extend the length of its franchise by a decade to invest in new rolling stock and upgrade the electrified line.

Chris Garnett, chief executive, outlined plans to buy a fleet of 10 tilting trains worth up to pounds 200m and make a substantial upgrade to run trains at 140mph for most of the east coast journey. In return GNER wants to extend its licence from seven years to 17.

"We know now that unless we make additional capital investment we will have acute difficulty in carrying the numbers of passengers," said Mr Garnett.

Under the current legalisation, the length of a franchise cannot be extended without being re-tendered and offered to other competitors, but he believes the Secretary of State has the authority to waive that part of the process.

The company has held exploratory talks with the new administration, but Labour ministers have yet to come to terms with the intricacies of the private railways and a decision is not expected for some months.

GNER, which has been run by Sea Containers for 12 months, considers itself a victim of its own success, with passenger volumes up 8 per cent, resulting in passenger revenues of pounds 252m.

The problem for GNER is that it has an average load factor of 59 per cent.

It predicts that this will rise within two years to 65 per cent - which will mean that most trains in the rush hour will be overcrowded.