Rail bidding time extended
Friday 24 March 1995
Mr Salmon released figures yesterday showing that the 37 organisations had put in a total of 160 expressions of interest for the first eight franchises. Although Mr Salmon did not release any names, several companies such as Stagecoach, Badgerline and London & Continental, the consortium which includes Virgin, have expressed interest in all eight franchises. Most of the bidders that have come out publicly are bus companies, raising the possibility of intervention by the MMC if they bid for areas where they already run bus services.
Management buy-out teams on all eight lines - Gatwick Express, Network SouthCentral, Midland Main Line, Scotrail, East Coast Main Line, South West Trains, Great Western and LTS - and BR itself, as a potential bidder of last resort, are among the bidders, leaving 28 commercial companies and consortia. This is lower than the figure of 50 companies given by the Government during the passage of the rail privatisation legislation in 1993 and it has prompted Mr Salmon to leave his door open for three weeks to allow for late applications.
The invitation to tender for the first three lines - Great Western, LTS and South West Trains - will now be issued in May 1995. Gatwick Express, which was to have been in that first group, will now be in the second group of five franchises because several bidders have expressed an interest in both Network SouthCentral, which runs trains to the south coast from Victoria via Gatwick, and Gatwick Express. This includes the management team of Gatwick Express itself, and Mr Salmon will face the problem of how to cope with this bid given the Government's stated aim of encouraging competition on the railways.
The closing date for pre-qualifying for this second group has been delayed until 2 June. These delays raise doubts about the Government's ability to comply with its own strict timetable of franchising out "51 per cent of the railway by 1 April 1996".
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