East coast line warning deals blow to GNER

GNER's new 10-year franchise to operate intercity services between London and Scotland was dealt a financial blow yesterday after Network Rail warned that capacity on the East Coast Mainline is full.

The train operator has applied to run scores of additional services on the line to meet its ambitious passenger growth targets. It needs to increase revenues by about 30 per cent over the next decade to afford the £1.3bn premium payments it has agreed to make to the Government. The biggest increase in capacity will be on the London to Leeds route where the number of trains is due to rise from 53 to 65, enabling GNER to operate a half-hourly service throughout the day.

But Network Rail said the only way that GNER could increase the number of trains was if additional platforms were built at London's King's Cross station or other operators were kicked off the line.

The infrastructure operator's findings do not bode well for Grand Central, a new train operator which has applied for permission to start high-speed services from Sunderland and Bradford to London using the east coast route. Other train companies using the line include Cross Country, Central Trains and Hull Trains and the freight operator EWS.

Network Rail is due to submit a final report on east coast mainline capacity in January to the Office of the Rail Regulator (ORR), which will have the final say on allocating new train paths to the various operators.

"The East Coast Mainline is one of the busiest rail routes in Europe. Our detailed analysis concludes that without further infrastructure enhancements it will be very difficult to deliver the additional services proposed by both GNER and Grand Central Railway," a spokesman for Network Rail said.

The organisation is due to increase the number of platforms at King's Cross but not until 2012, by which time the new GNER franchise will have only three years left to run.

A spokesman for GNER said: "What Network Rail has said does not come as any surprise. The route isn't big enough for both us and Grand Central. But we are still confident of delivering on our franchise commitments by working with other operators and we look forward to the ORR's decision next year."

One way of increasing capacity for passenger services would be to use more of the train paths allocated to freight operators. Only one-third of the capacity earmarked for freight trains is being used at present.

Under GNER's franchise agreement, the Government will cover 80 per cent of any shortfall in forecast revenues after four years by adjusting the premium payments. GNER has pledged to invest up to £200m on the route and aims to increase passenger numbers from 16.6 million last year to more than 20 million.