National Express wins battle to take over GNER line

Transport group National Express today won the battle to run a prestigious London to Scotland rail franchise.

The company will take on the East Coast Main Line (ECML) deal after beating off opposition from First Group, Arriva and a partnership between Virgin and Stagecoach.

National Express, which also runs the c2c and One Railway, will take over the running of the route in mid-December.

Current operator GNER has run ECML services since 1997 and won a competition to retain the franchise in 2005.

But the Department for Transport retendered the deal after GNER's parent company, Bermuda-based Sea Containers, filed for bankruptcy protection in the US last year.

GNER was also obliged to pay the Treasury a total of £1.3 billion in premiums during the life of the franchise, but revenues failed to match expectations.

National Express will pay the DfT £1.4 billion during the franchise, which will run until March 2015.

Under the deal, the operator will be expected to deliver faster journey times, with London to Leeds services taking two hours, as well as more London to Edinburgh trains with journeys lasting four hours 20 minutes.

National Express has committed to ensuring that nine out of 10 trains run on time, as well as environmental benefits such as reducing fuel consumption per passenger kilometre by 28 per cent over the life of the franchise, and investment in four "green" stations.

Rail minister Tom Harris said: "There is provision in this contract for extra services and fewer delays. National Express will also invest in stations and on-board services."

National Express said unregulated fares are likely to rise by an average of retail price inflation (RPI) plus 2.1 per cent a year during the franchise.

The Government currently limits annual rises in regulated fares to RPI plus 1 per cent.

National Express chief executive Richard Bowker said: "We have won with a bid which is ambitious, deliverable and structured to generate shareholder value."

Mr Harris said the fare rises were "significantly less" than those announced

by other franchises recently.

"The whole deal is very good news not just for passengers, but for the taxpayer," he told BBC Radio 4's Today programme.

"Provided that National Express are committed to and deliver the performance improvements written into this contract, I do not think most passengers are going to have much to complain about."

He told the programme: "I don't buy this idea that people are being priced off the railways; the very opposite is actually happening: more and more people are choosing to use the railways because we do have an improving system."

Defending the franchise system, he said passenger groups would be more involved in future.

Anthony Smith, chief executive of customer watchdog Passenger Focus, said: "We

welcome the announcement as it ends a period of uncertainty for passengers using

East Coast services.

"The commitment to improving services is a key passenger concern but represents a significant challenge for the new operator and for Network Rail to get from where they are today."

Mr Smith went on: "The longer-term plans to provide more seats and more services should be pursued with vigour.

"However, we remain concerned at the accumulative affect of year-on-year unregulated fare rises way above inflation."

To run from December 9 this year until March 31 2015, the contract will, among other things, deliver:

* From December 2010, there is provision for up to 25 extra train services - around 14,000 seats - each weekday;

* A new London-Lincoln service and a new London-York service, both of which will operate every two hours;

* A £7.4 million upgrade of stations and up to 2,000 more car parking spaces to be provided by the end of the franchise with half of these expected within the first two years;

* Onboard trains, wi-fi will be free in standard class and full dining services will be retained on 87 weekday trains.

Had the Virgin-Stagecoach bid been successful, GNER would have taken a 10 per cent stake in the new company.

GNER chief executive Jonathan Metcalfe said today: "Naturally, we are disappointed that our joint bid was unsuccessful, but we now have to look to the future and work with the successful bidder to create an even bigger and better railway. The needs of our passengers will always come first.

"National Express will inherit a high-performing and fast-growing railway with fantastic staff and an enviable reputation for high service standards.

"Over the past 11 years, we have transformed this railway and built up considerable goodwill amongst passengers and our many stakeholders. We will do everything we can to ensure a smooth and professional handover."