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Eurostar and Keolis bid to run east coast railway line Eurostar and Keolis bid to run east coast railway line
(about 7 hours later)
Two companies owned by the French state-backed railway have tossed their hats in the ring to run the east coast mainline, which the coalition is to privatise before the next election. Eurostar is entering the bidding for the east coast mainline rail franchise, as the government prepares to privatise the London-Edinburgh route before the next general election.
Keolis and Eurostar, both majority-owned by SNCF, have announced a joint venture to bid for the franchise. Eurostar and Keolis, both majority-owned by the French state rail operator, SNCF, have announced a joint venture to bid for the contract.
The preliminaries to an invitation to tender are expected to be issued by the Department for Transport in October, with a view to restoring the line to the private sector in March 2015. The Department for Transport (DfT) will start vetting bidders next month, with a view to restoring the line to the private sector in March 2015.
The train operating company East Coast is currently run by Directly Operated Railways (DOR), an arms-length company owned by the state. Brought in to run the line after National Express defaulted on the National Express East Coast subsidiary, East Coast has paid more than £600m in premiums to the Treasury in the past two years. The east coast franchise is currently run by a government-owned company, Directly Operated Railways (DOR). It was brought in to operate the line as East Coast after National Express defaulted on the London-Edinburgh franchise in 2009, when the transport group admitted it could not afford the £1.4bn in payments due over the life of the contract.
Labour has said it would keep the east coast mainline in public hands. At its conference the shadow transport secretary, Maria Eagle, attacked the "nonsense" of allowing foreign state-backed firms to run UK railway franchises while excluding DOR. By contrast, East Coast has paid more than £600m in premiums to the government over the past two years.
The DfT has said it will try to attract bids from as many international firms as possible to promote genuine competition in the industry. A bidders' day held by the government in July attracted interest from firms across Europe and the far east. Labour has said it would keep the east coast mainline in public hands. At its conference the shadow transport secretary, Maria Eagle, attacked the "nonsense" of allowing foreign state-backed firms to run UK railway franchises while excluding DOR. Deutsche Bahn, the German state-owned rail company, is also a prominent player in Britain through its ownership of Arriva, the business that operates the Chiltern Railways, CrossCountry and Arriva Trains Wales franchises.
Keolis, which already operates four train franchises in the UK in a partnership with Go-Ahead branded Govia, will be the lead partner in the bid, with a minority share to be held by Eurostar. It marks a further potential expansion for Eurostar, which last week announced it would start direct services to the Dutch capital, Amsterdam, from London. The DfT has said it will try to attract bids from as many international firms as possible in order to promote competition. A bidders' day in July attracted interest from firms in Europe and the far east.
Keolis, which already operates four train franchises in the UK in a partnership with Go-Ahead Group, will be the lead partner in the bid, with a minority share to be held by Eurostar. It marks a further potential expansion for Eurostar, which last week announced it would start direct services between London and Amsterdam.
Alistair Gordon, chief executive of Keolis UK, said: "What's exciting about the east coast mainline is that there is an opportunity to transform a hugely important national route, which is yet to see the same levels of investment as the west coast mainline."Alistair Gordon, chief executive of Keolis UK, said: "What's exciting about the east coast mainline is that there is an opportunity to transform a hugely important national route, which is yet to see the same levels of investment as the west coast mainline."
The successful bidder for the franchise is expected to be awarded a contract in October 2014, with the franchise commencing in February 2015. The successful bidder for the franchise is expected to be awarded a contract in October 2014, with the franchise commencing in early 2015.
Sir Richard Branson has indicated that Virgin will bid for the route, probably along with Stagecoach, his partner in Virgin Rail. National Express has however ruled itself out after the debacle of its last successful bid to run the line. Richard Branson has indicated that Virgin will bid for the route, probably along with Stagecoach, his partner in Virgin Rail. However, National Express has ruled itself out of the east coast bidding.
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