Bidders vie for East Coast franchise

Possible bidders for the flagship London-Edinburgh rail franchise have approached senior managers at the failed train operator Great North Eastern Railways (GNER) as "potential partners".

Among those "registering an interest" in the East Coast mainline contract by yesterday's deadline were First Group, Sir Richard Branson's Virgin Group and National Express, where Richard Bowker, ex-Virgin director and former chairman of the Strategic Rail Authority, is chief executive.

While GNER itself, a subsidiary of the bankrupt Sea Containers group, did not submit proposals, its managers have been in discussions with potential bidders. A spokesman at GNER, which is managing the Anglo-Scottish rail route on behalf of the Department for Transport since relinquishing the franchise, said: "We have been through a lot, but we achieved a lot and we want to be involved in the future."

The incumbent lost the franchise after conceding that it would be unable to meet the £1.3bn premium payment over 10 years it had promised the Government.

GNER will operate the route under a temporary management contract until a successor has been selected.

A First Group spokesman said: "We believe we can throw out a innovative bid that would be good for both passengers and taxpayers."

FirstGroup already operates four rail franchises.

Virgin and the giant transport group Stagecoach confirmed their interest in the franchise. The two groups, which jointly operate the West Coast Main Line and CrossCountry franchises, are bidding for the East Coast route under a venture company called Inter City Railways.

Sir Richard said: "Stagecoach and Virgin have proved that Britain's railways can be transformed and that it is possible to provide good-quality service and passenger growth and operate highly efficient franchises. Together we have a breadth of skill in high-speed operations and dealing with major infrastructure issues that is unsurpassed in the UK."

Later National Express, which already runs Midland Mainline and the London to Tilbury and Southend train company c2c, also confirmed it had entered the race for the East Coast franchise.