GNER's £1bn bid to win East Coast

GNER is set renew its franchise on the East Coast Main Line from Edinburgh to London after bidding almost one-third more than its nearest rival.

GNER is set renew its franchise on the East Coast Main Line from Edinburgh to London after bidding almost one-third more than its nearest rival.

The Strategic Rail Authority is believed to have recommended GNER wins the new 10-year deal which will bring in more than £100m a year for the Treasury.

The £1bn price tag is said to be about £300m more than other bids. Alistair Darling, the Secretary of State for Transport, is due to decide by mid March whether he will follow the SRA's recommendation and appoint GNER as the preferred bidder.

It will be the first time that an incumbent has won a renewed franchise after an open auction. GNER has fought off competition from FirstGroup, the Danish state railway, and Virgin and Stagecoach.

GNER currently pays £25m a year to the Government to operate the East Coast Main Line, one of the busiest and most profitable franchises on the network. The company said yesterday that it had not had official confirmation that it was the SRA's recommendation. A spokesman said: "We look forward to hearing the official announcement in the next fortnight. We put in a strong bid and hope that we are the preferred candidate."

GNER has increased passenger numbers on the line by 34 per cent since 1996, and believes it can bid more than rivals for the new franchise because of its experience in seeking out growth opportunities for the line. Other rail industry executives are more sceptical and have suggested any future disappointments could cause tensions between GNER and its parent company, Sea Containers.