High-speed trains run out of steam

Plans for the new Transpennine Express rail service, which will run from Liverpool to York, are understood to have been dramatically scaled down as government purse strings are tightened.

The aim had been to develop a new, high-speed, hi-tech service connecting Liverpool, Manchester, Leeds and York, plus other smaller towns in the area. Up to £2bn of investment had been expected in new trains and railway lines, redesigned stations and improved links with other transport routes.

Private companies, including Connex, FirstGroup and the incumbent operator Arriva, had lined up with bids to run the new franchise. They had submitted "blue sky" proposals that could have transformed the rickety service, which is currently part of a larger franchise in the north of England.

But since the Strategic Rail Authority (SRA), which regulates train companies, announced they would have to re-bid, despite the millions spent on preparing previous bids, it is understood that budgets have been tightened.

The precise specifications for the new bids have not been released yet, as the SRA is consulting passenger groups in the affected regions. But one source said the previously ambitious plans had been dramatically scaled back.

"The revised bid specifications will be more low-cost, low-spec options, not requiring huge amounts of capital investment ... it will be about what can be done with the existing service," said an insider.

It is thought the moneyprivate companies receive from the SRA in return for the investment they put in will be dropped substantially, making it not worth their while.

During the previous bidding round, Connex was believed to have been favoured. This outraged some local MPs, in view of its poor performance in the south of England.

A Department of Transport spokesperson denied the bids had been scaled down. "The SRA is consulting with [passenger transport groups] to get the basic standards required," he said. The new bid specifications are expected to be released at the end of next month.

The SRA could not be contacted for comment about whether funding would be reduced or not.