Anglia rail takeover referred to competition watchdog

The Office of Fair Trading caused fresh mayhem in the rail industry yesterday by referring National Express's takeover of the Greater Anglia franchise to the Competition Commission.

The move came two months after National Express began operating services, five months after it was awarded the franchise by the Strategic Rail Authority and a year after it was selected as one of the shortlisted bidders.

John Vickers, the chairman of the OFT, said it was concerned that National Express's takeover of the franchise made it the only public transport operator on a number of routes in the Greater Anglia area.

In particular, the OFT is concerned that National Express will now have a monopoly on rail services from London to Southend and a monopoly on both rail and coach services between London and Norwich and London and Lowestoft.

The decision to delay referring National Express is in stark contrast to the OFT's action over ScotRail, where it sent First Group's bid for the franchise to the Competition Commission before the SRA had selected a winner. First Group was subsequently cleared to bid but the outcome of the contest has still not been announced.

Phil White, the chief executive of National Express, said he was "very disappointed" at the OFT's decision, adding: "We will be reviewing the detail of this decision and its implications while considering our position."

An OFT spokesman said the reason First Group had been referred early in the bidding process was because it had formally notified the OFT of its bid for ScotRail whereas National Express had not done so in the case of Greater Anglia.

"We rely on the SRA telling bidders whether they perceive a competition problem. If they choose not to they run the risk of a referral. We cannot examine every bidder for every route in every competition."

A spokeswoman for National Express added: "From our point of view it is frustrating because a referral takes up a lot of time and effort when we would much prefer to be getting on with sorting out and running the business."