French-owned train firm bids for Government-run East Coast line

A French state-owned rail operator is planning to bid to run the East Coast Main Line, which the Government plans to re-privatise having taken control of the London-Edinburgh route in 2009.

Keolis, whose major shareholder is SNCF, will enter a franchise auction that is expected to start early next year. The contest is expected to be politically charged, as the Department for Transport had to strip National Express of the franchise when the company could not afford its payments to manage the line.

National Express paid £1.4bn for East Coast, a bid that proved to be too high. This has led to similar fears that FirstGroup paid too much this summer for the lucrative West Coast Main Line, having agreed to £5.5bn for the 13-year contract. Virgin Rail, the existing operator, who bid £4.8bn, has sought legal action to prevent the loss of the franchise, describing the system as "flawed". However, FirstGroup is due to start running the line from 9 December, which is likely to spark close scrutiny in how the East Coast tender process is run.

Keolis's UK arm, which is chaired by Sir Mike Hodgkinson, has been mulling which other franchises to pitch for. It snubbed the Essex Thameside route, which saw four companies enter offers before last Thursday's deadline.

A Keolis spokesman said the company is "looking at a number of franchises which are coming up and bidding as appropriate".