National Express, the coach company, is close to victory in the controversial battle to take over the Gatwick Express rail franchise after the company was yesterday confirmed as the preferred bidder.
The Office of Passenger Rail Franchising named National Express ahead of rival bids from Richard Branson's Virgin and a management buyout team that had joined forces with British Airways.
National Express was also chosen yesterday as Opraf's first choice to buy the Midland Main Line rail franchise. Roger Salmon, the rail franchising director, said both bids raised competition issues and he has passed on details to the Office of Fair Trading to investigate.
Gatwick Express operates a non-stop service between London's Victoria station and Gatwick airport. Midland Main Line operates Inter-City passenger services, principally between the East Midlands, South Yorkshire and London's St Pancras.
Bidding for Gatwick Express has been dogged by concern in the City about leaks, and doubts over whether a single company should also be awarded the Midland Main Line franchise.
The OFT is expected to be more concerned with Midland Main Line, as National Express runs coach services to destinations served on the rail route. The OFT did not hold an inquiry into the purchase by bus company Stagecoach of South West Trains because there was little overlap.
National Express said it was confident that ownership of the franchises would not go against the public interest. The company said: "The main competitor to rail services is the private car, not National Express coach services. The overlap between the markets served by NE coach services and these train sevices is very small."
The company's shares rose 16p to 502p as analysts said National Express should do well from the diversification into rail.
Brian Wilson, the Labour Party's transport spokesman, said: "The inevitable outcome of handing train services over to bus companies is that they will substitute buses for trains whenever they find it advantageous to do so, without regard to passenger choice."
"Both Gatwick Express and Midland Main Line have enjoyed substantial public investment and are guaranteed money-makers. We are now seeing the country being carved up into local transport monopolies without regard for the public interest."
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