The company which operates the Orient Express is to be given the franchise to run Britain's most modern railway, the East Coast main line.
Sea Containers, which also operates Hoverspeed and SeaCat, has become the sole preferred bidder to win the franchise for the InterCity East Coast services out of King's Cross, which was refurbished at a cost of nearly pounds 1bn in the late 1980s. Final negotiations are taking place and the line could be handed over in the late spring.
Sea Containers will receive substantial subsidy to run the line, similar to the pounds 47.9m BR received this year. Over 11 million passengers used the line last year and the company hopes to increase its pounds 280m revenue by around 5 per cent per year.
The Bermuda-based company runs a number of other tourist trains in addition to the weekly Orient Express including British Pullman, which runs tourist specials to places like Canterbury and Cambridge.
James B. Sherwood, its American president, is an outspoken character who is a patron of the Venetian arts. The company acquired the BR owned ferry operation Sealink when it was privatised in the 1980s but soon sold it and owns a number of hotels across the world, as well as extensive container operations.
Sea Containers is a surprise choice to run the line because it has consistently criticised the structure of the rail privatisation scheme and was embroiled in a fierce behind the scenes row with the Government over its failure to win the franchise for South West Trains.
The company has always argued that it should be able to control the railway infrastructure, which is being sold to Railtrack, because so many delays and problems are a result of signalling and track failures. It has beaten off bids from two bus companies, Stagecoach and National Express, and the management buy-out team.
It is thought Sea Containers had sought a 12 year franchise but was only granted the standard seven year term. There are no plans for new trains because the rolling stock is only a few years old. A scheme to introduce tilting trains, which could cut up to 30 minutes off the four and a quarter hour journey to Edinburgh, has been rejected by the company.
Brian Wilson, Labour's transport spokesman, called the decision a "public scandal" because of Sea Containers' handling of Sealink which it bought and then quickly sold on. He said: "This is the British Rail line which has benefited most from public investment. Now it is being handed over to a company whose record with public assets leaves a lot to be desired."