Nat Express to bid in rail sales

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National Express Group, the coach, bus and train operator, yesterday pledged to bid for all the remaining rail franchises in a move that intensified the battle over the final phase of the controversial rail sell-off.

The company, which already controls two rail franchises, put itself firmly in competition with Stagecoach Holdings, the acquisitive transport group which has already made the same commitment.

Earlier this year National Express won the bidding to operate the lucrative Gatwick Express franchise, claimed to be the only profitable route on the old British Rail network, along with Midland Main Line which runs trains from London's St Pancras station to the East Midlands and Sheffield. In the first two months' trading these rail businesses made operating profits, including Government subsidies, of pounds 401,000.

Twelve more rail franchises are still up for grabs, but National Express said Opraf, the rail franchising office which is managing the privatisation process, had made it clear it preferred bids from each interested company for most or all of the remaining franchise areas.

"We think we're going to get another slice of the action," said Ernie Patterson, chief executive. He suggested Opraf's strategy was to try to guarantee bids for the least attractive franchises, which include the cash-starved West Coast Main Line.

But National Express admitted its approach could bring it into further conflict with the competition authorities. In the case of one available franchise, Scotrail, National Express already has a virtual monopoly over coach travel between London and Scotland.

It means the on-going investigation by the Monopolies and Mergers Commission into the acquisition of Midland Main Line will take on even greater significance. Mr Patterson said he would be submitting evidence to the MMC later this week and was expecting a final decision in November.

National Express made the announcement as it revealed a 160 per cent surge in pre-tax profits in the first half of the year to pounds 20m.

Excluding the impact of the recent takeovers, operating profits went up by 143 per cent to pounds 19.5m.

The company said it was looking for further takeover opportunities beyond the rail sector.

It is close to finalising a joint bid for the privatisation of Australia's airports, in competition with BAA.