French set sights on private railway franchise

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The Tricolour could be flying from the first trains to be privatised after a French company announced it was bidding for one of the first rail franchises.

With French firms already dominating privatised water companies and council services, a successful bid for a train company could embarrass Europhobe ministers.

The Paris-based Compagnie Generale d'Enterprises Automobiles, has joined the management and employee buy-out team of South West Trains to bid for the franchise of the pounds 250m-a-year business. CGEA is the second largest private transport company in Europe, running train services in Brittany and the Cote d'Azur and many bus and light-rail services, including the new tram system in Rouen.

The French company will provide the capital for the bid, including the pounds 37m bond needed as security for running the services as required by the franchising director.

South West Trains is scheduled to be one of the first three train services to be privatised and initial bids have to be in by the end of next month. While management and employee buy-out teams are expected to bid for all the 25 franchises, this is the first one to announce a tie-up with a large finance company.

Management buy-out bids are in an almost unassailable position to win the franchises for rail privatisation because of the expertise of the staff and outsider bidders will find it difficult to compete.

Peter Field, managing director of South West Trains, said that the 4,000 staff would all be offered shares in the new company and that they would own 51 per cent of the shares. He stressed: "The control of the company will remain in the hands of the staff and management." However, he accepted that staff might sell their shares allowing the French company to take over.

South West Trains is the biggest of the 25 companies due to be privatised by the Government over the next four or five years. It runs most of the services from Waterloo with 1,500 trains carrying 270,000 passengers a day. It leases 176 stations and 255 train sets.

Twelve of the 31 smaller water companies are in French hands and French companies have won more than 50 contracts for street cleaning or refuse collection.