Go-Ahead stripped of Thames franchise

The rail and bus group Go-Ahead was stripped of its Thames Trains franchise yesterday in the latest move by the industry regulator to shake up the network.

The franchise will be handed over to the rival operator FirstGroup next April for a two-year period, after which it will be incorporated into the new and larger Greater Western franchise being planned by the Strategic Rail Authority from 2006 onwards.

Despite consuming £80m of public subsidies since Go-Ahead was awarded Thames Trains in 1996, the franchise has been one of the poorest performing commuter routes in the country. It was also one of the two train operating companies involved in the Paddington disaster in 1999 which killed 31 people. The accident happened after a Thames Trains driver went through a red light and crashed head-on into an oncoming Great Western inter-city express.

This is FirstGroup's second franchise win in recent months after the award of the new Trans-Pennine route and puts the company in a strong position to secure the Greater Western franchise when it is put out to tender.

Go-Ahead shares fell 3 per cent on news of the franchise loss, which represents a blow to the group's hopes of expanding its rail business. Go-Ahead also operates the Thameslink and South Central franchises. Thames Trains operates services in the Thames Valley, the Kennet Valley, the Cotswolds up to Stratford-on-Avon and the North Downs line between Gatwick and Reading.

FirstGroup is planning to combine Thames Trains with its existing First Great Western franchise and introduce faster trains on commuter routes, particularly between Reading and Paddington.

Moir Lockhead, the chief executive of FirstGroup, said that capacity on Thames Trains could be increased by up to 20 per cent with the use of longer, faster rolling stock.

Apart from Great Western, FirstGroup's other franchises are Great Eastern and First North Western. It is also bidding for the Northern and ScotRail franchises and, through the recently-acquired GB Railways, for the new Greater Anglia franchise, the winner of which will be announced around the turn of the year.