Prism reopens talks with rail authority over franchise future

Prism Rail, the train operator, yesterday said it had begun negotiations with the Shadow Strategic Rail Authority about the future of the group's franchise portfolio.

The announcement came a day after the company said that talks with a number of parties about a possible takeover had ended. Yesterday it said: "Until the future of the existing Prism portfolio is known in relationship to the franchise replacement process, it has become apparent that it would be very difficult to conclude negotiations for a sale of the company to a third party."

The group currently runs the LTS (London, Tilbury and Southend), West Anglia Great Northern, Wales & West and Cardiff Railway lines. But like its rivals, Prism has been forced by the SSRA to renegotiate these contracts ahead of their expiry dates.

Discussions between the company and the rail authority, which are expected to be concluded in May, will centre on the potential early termination of Prism's Welsh franchises with a view to creating a single franchise for Wales, provisionally called WalesRail.

Mark Adams, Prism's finance director, said: "We believe we are in the driving seat with regard to the Welsh proposals."

He said the company would "potentially" resume its negotiations with possible suitors once the discussions with the SSRA were concluded. Prism shares yesterday closed unchanged at 330p.