GNER and First Group in rail battle

RAIL company GNER faces losing the lucrative East Coast Main Line contract between London King's Cross and Scotland.

The Strategic Rail Authority today put out to tender a new licence to run for up to 10 years from 2005. FirstGroup, stung by its failure to garner the new Greater Anglia franchise, immediately threw its hat into the ring.

It also faces competition to retain its Great Western franchise, most notably from a joint venture between GNER and Chiltern Railways.

Virgin Trains, owned by Sir Richard Branson and Stagecoach, could also bid. GNER, owned by shipping and leisure group Sea Containers, has long been regarded as one of the best UK train operators. However, its crown has slipped of late.

Though GNER is performing better than most long-distance services, the percentage of its trains arriving on time is falling.

Moreover, in 13 out of 14 performance categories, passengers said they were less satisfied with GNER.

Before the Hatfield derailment which killed four people in 2000, the East Coast franchise was scheduled to make enough profit to pay back tens of millions of pounds to the Treasury.