Coveted franchise operated by Bermudan company

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The Independent Online

Great North Eastern Railway's franchise is considered one of the plum services from the breakup of the British Rail network.

Great North Eastern Railway's franchise is considered one of the plum services from the breakup of the British Rail network.

The East Coast route was the jewel in the crown of BR InterCity services, and the franchise covers all services between London, Peterborough, Yorkshire, the North-east and Scotland right up to Inverness.

GNER runs one of the most heavily used passenger networks, with 92 per cent of its fleet in service six days of the week. Last year it carried 14.7 million passengers.

It was the only successful franchise bid by Sea Containers, a Bermuda-registered company listed on the New York Stock Exchange. Sea Containers has three main business areas: passenger transport; leisure; and marine container leasing. It also runs the Orient Express.

The GNER franchise was awarded to Sea Containers for a seven-year term from April 1996. It will be one of the first three franchises up for renegotiation by the Shadow Strategic Rail Authority. The next award will be for a 20-year franchise. The company is competing with Virgin Rail, the joint venture between Virgin Group and the transport company Stagecoach. The company is also in the bidding for the South West Trains franchise.

GNER is run by Christopher Garnett, the former commercial director of Eurotunnel and brother of former Tory minister Virginia Bottomley.

This tragedy is likely to make the bids more difficult for GNER. It follows a series of bad punctuality results. Figures at the start of this month from the Shadow Strategic Rail Authority showed that GNER had the biggest slump in performance of all train operating companies, with punctuality of the company's trains 9 percentage points worse. In the June to September period 77.2 per cent of GNER services arrived on time compared with 86.5 per cent in the period the previous year.

A spokesman for GNER at the time said there were nine "dramatic events" in August that explained the sharp deterioration, including "thunderbolts, flooding, landslide, fires and security alerts".

GNER, and many other operators, partly blames Railtrack for failing to improve the infrastructure quickly enough.

GNER reported a profit of £13.2m in the year to January 1998 on turnover of £323.6m. Passenger revenues amounted to £279.2m, with a subsidy payment of £57.7m.

After the privatisation of British Rail, GNER began operations in April 1996, winning a seven-year franchise to operate high-speed passenger services on the East Coast Main Line between King's Cross station in London, the East Midlands, Yorkshire, the North-east and Scotland.

Since 1996, GNER has increased its services by 12 per cent to 112 trains a day. It operates 40 trains. GNER has said that if it wins a franchise extension, it will introduce tilting trains that could shorten the journey time between London and Edinburgh by up to 30 minutes and invest £140m in trains and stations.