Shortlists drawn up for first railway franchises

Four bidders have been shortlisted for each of the three railway lines in the first tranche of rail franchises, according to industry sources.

While the Government will be pleased that there seems to be reasonable numbers of serious bids for each of the lines, there remains serious dissatisfaction among some of the bidders over the length of the proposed franchises and the complexity of the process.

The shortlisted consortia have until 27 October to submit their final bids for the three lines: Great Western Rail (InterCity services out of Paddington); South West Trains (suburban and regional services out of Waterloo); and LTS (the London, Tilbury and Southend line out of Fenchurch Street).

Roger Salmon, the franchising director, has refused to divulge the names or numbers of bids, but most are now known. Several even issued press releases, in apparent contradiction of the confidentiality terms.

The bidders for LTS include: GB Railways, a partnership of four people, one of whom, Jeremy Long, successfully led a management buyout of 11 motorway services from GrandMet 10 years ago; Prism, which links several bus operators; and Atless, the new name for the management buyout. Britain's largest bus operator, Strathclyde Bus, has been eliminated.

Bids for Great Western include: National Express, the long-distance bus company; the management buyout team; Resurgence Railways; and Sea Containers.

Sea Containers has also bid for the fourth franchise, SWT, but only on condition that it wins both lines. Although the company has always stressed that it wanted to be able to control the infrastructure - this belongs to Railtrack - as well as the train services, it has now accepted that the Government will refuse to allow this as it would jeopardise the more lucrative privatisation of Railtrack.

Sea Containers gave a glimpse of the way it intends to run the business. It said it plans to open new parkway stations, increase car parking and "will consider the possible use of double-deck carriages".

The management buyout team for SWT, which has linked up with Compagnie Generale des Eaux to form Astia, is another bidder and two others are known to have been shortlisted, possibly including Stagecoach.

While all these bidders are likely to put in the necessary compliant bids, most prefer non-compliant offers. In particular there is widespread dissatisfaction with the notion of seven-year franchises. One bidder said: "To see the benefits of privatisation, passengers will want to see new trains. But with only a seven-year franchise, it will not be possible to provide new rolling stock because it would have to be guaranteed by the franchising director and we are back to PSBR problems."

Another bidder also complained about the complexity of the process, saying: "We only have six weeks to check all the contracts. What do we do if we find one we don't like? It will simply be impossible to change it because there isn't time."