Paris Metro on short list as Arriva loses Merseyrail

Three foreign train companies, including the operator of the Paris Metro, have been shortlisted to run the commuter rail service on Merseyside following the decision to remove the franchise from Arriva Trains.

The move is a severe blow to Arriva and marks the first time that an incumbent operator has failed to make the shortlist from which the preferred bidder will be chosen.

Arriva's Merseyrail franchise, the second most heavily subsidised in the country, runs out next July. The three bidders shortlisted by the Strategic Rail Authority (SRA) and the Merseytravel Passenger Transport Executive to take on a new seven-year franchise are RATP, which operates the Paris Metro and fast commuter lines across Paris, Keolis, a division of the state-owned French railway SNCF, and Dutch Railways, which is bidding in partnership with the UK support services group Serco, the operator of the Docklands Light Railway.

A spokesman for the local passenger transport authority said it had decided to drop Arriva because it was only offering a "bog standard" service. "The shortlisted bids are more imaginative in terms of investment in rolling stock, frequency of services, staffing levels and station improvements," he added.

But Euan Cameron, the managing director of Arriva Trains, maintained that its bid would have resulted in "extremely affordable rail services with high standards of punctuality and reliability as well as cleanliness and security".

This is the first time that France's RATP has been shortlisted for a UK rail franchise. SNCF already has a minority interest in the Thameslink and South Central franchises, where it partners Go-Ahead.

Arriva took over the Merseyrail service two years ago when it acquired the previous operator MTL. Merseyrail, which provides rail services between Liverpool and Southport and towns on the Wirral peninsula, received a subsidy of £54m last year, equivalent to 21p for every passenger mile.

The MTL purchase also brought with it Northern Spirit, now known simply as Northern, which operates regional services in the North-east and north Yorkshire. Northern is one of the franchises hit hardest by the wave of industrial action that has swept the rail industry. In the first half of the year, strike action cost it £5m.

There was a small consolation for Arriva – it has been shortlisted to bid for the new Wales and Borders franchise that is being created by the SRA. The franchise will run for 15 years and covers all local and regional rail services within Wales as well as services from Cardiff to Hereford, Shrewsbury, Manchester and from Wales to Birmingham, the North-west and West Country.