BR meets itsWaterloo as French take over

A French company is expected to be given the franchise to run one of Britain's busiest commuter rail networks.

Compagnie Generale des Eaux is expected to be told by the franchising director, Roger Salmon, it has become the sole preferred bidder for the franchise for Network SouthCentral, which runs the train services from Victoria and London Bridge stations to the south coast between Hastings and Southampton and many shorter suburban routes.

The French conglomerate already has significant interests in the UK, including the Onyx street cleaning and refuse collection services and several small water companies with a total of 3 million customers.

It narrowly missed out on winning the franchise for South West Trains last month but this time it has beaten off a combined challenge from Stagecoach, which won the South West franchise, and another bus company, National Express.

National Express is thought to be the favourite to win the franchise for Midland Main Line, the InterCity services out of St Pancras, also due to be announced this week. But the third franchise at the final bid stage, Gatwick Express, is an open contest between the management buy- out team, which has linked up with British Airways, and Richard Branson's Virgin group.

Claims by Mr Branson that Virgin had won the franchise were being discounted last night by sources close to Mr Salmon. Both have agreed to pay to operate the line, rather than receive subsidy, as Gatwick Express is the only profitable franchise of the 25 on the network.

Currently, British Rail receives about pounds 81m a year in subsidy to run Network SouthCentral services and the new operator is expected to receive about the same amount initially, but a reduced amount each year over the period of the seven-year franchise.

On Friday The Independent revealed that the Bermuda-based ferry company, Sea Containers, had won the franchise for the East Coast Main Line. South West Trains and Great Western Trains, the first two privatised lines, started operating under their new operators on 4 February and the four new private operators are expected to take over from BR within the next couple of months.

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