Firm's anger at rail franchise snub

By Duncan Brodie

TRAIN and bus operator FirstGroup was last night considering legal action after being axed from the list of bidders for the new Greater Anglia rail passenger franchise.

Staff at the group's First Great Eastern operation were said to be “shellshocked” by the Strategic Rail Authority's decision to omit their bid from the final three.

The Greater Anglia franchise, due to be introduced from April next year, will bring the current Great Eastern, Anglia Railways and West Anglia operations out of Liverpool Street under a single management.

As widely expected, GB Railways, parent company of Ipswich-based Anglia Railways, has made the SRA's final shortlist, together with National Express, holder of the WAGN franchise which includes the West Anglia services.

However, the only other bidder out of the original nine to make it through to the final stage is Arriva, whose rail interests until now have been confined to the north of England.

FirstGroup - which also owns extensive bus operations across Essex, Suffolk and Norfolk - said it was “extremely surprised and disappointed” not to have made the SRA's final shortlist.

First Great Eastern had an “outstanding” operational record, said the group, and this, together with the scope for integration of rail and bus services and the financial strength of the company, should have made its bid “an extremely strong contender”.

“FirstGroup is urgently seeking a meeting with the Strategic Rail Authority to persuade them to reverse their decision, failing which it will consider all remedies available to it,” the statement added.

An insider at First Great Eastern confirmed that this could mean a challenge through the courts, and added: “We are absolutely shellshocked by the news; we cannot believe this has happened.

“FirstGroup is a former Rail Operator of the Year and we are one of the best-performing companies in the industry.”

Under a new franchising policy adopted by the SRA, potential operators are being set firmer guidelines and incentives than in the past in the areas of customer service and business priorities, although the full specification for the Greater Anglia franchise has still not been published.

SRA chairman Richard Bowker said yesterday: “The qualification threshold was set at a very demanding level indeed to ensure the best possible competition on behalf of passengers and taxpayers.”

The Greater Anglia franchise, which will run for up to 10 years depending on the detail of the final bids submitted, is officially due to start in April next year although this appears now to be in some doubt.

The SRA said yesterday it did not expect to announce its preferred bidder for the new franchise until “spring 2004”, in which case there would not be enough time to complete the legal process for an April start.

It now seems likely that the current franchises will be extended for a few months, which would have the benefit of sparing the new franchisee from having to cope with the disruption created by the closure of Ipswich tunnel for engineering work, currently scheduled for summer 2004.

A spokesman for Anglia Railways said yesterday that the company was “delighted” at the success of its parent group in qualifying for the next stage of the process and now looked forward to submitting its full bid.

GB Railways also issued a trading statement yesterday reporting growth across its businesses, with Anglia Railways' annual revenue now exceeding the level achieved before the disruption which followed the Hatfield crash in 2000.

There was also some better news for FirstGroup yesterday as it was named among five bidders to qualify for the next round of the contest for the new Northern Rail franchise.

GB Railways is also on the list, together with Arriva, the Eurailco consortium and a joint Serco Rail/Netherlands Railways bid. The successful bidder is due to be named in spring 2004 and to take over the operation in “late summer”, with the new franchise running for up to seven years.