Rivals on track for railways battle

NATIONAL Express and FirstGroup are set for a battle over lucrative rail routes out of London now that the Strategic Rail Authority has outlined plans to cut the number of operators in key stations to one.

SRA chairman Richard Bowker believes the move will boost capacity and reduce delays in London stations. The cuts, to be introduced gradually as franchises come up for renewal over the next few years, are part of a wider move to cut the total number of train operators from 25 to five or six.

Liverpool Street will emerge as a key battleground. Either FirstGroup's First Great Eastern or National Express's WAGN will prevail, absorbing the routes operated by the smaller Anglia Railways, owned by GB Rail.

FirstGroup's First Great Western service and Go Ahead's Thames Railway will slug it out over routes heading out of Paddington. FirstGroup is favoured here also, but regulators may look askance on it controlling Paddington as well as Liverpool Street. One analyst said: 'Great Eastern out of Liverpool Street is a very lucrative route for FirstGroup. 'It serves a very affluent population, so it may be prepared to give up other routes to keep it.'

Euston Station is expected to fall to Virgin. Despite a preference to stay away from regional services, Virgin will probably absorb the only other operator, Silverlink, owned by National Express.

National Express rose 18p to 560p and FirstGroup 11 1/2p to 276p, but analysts said it is too early to say if the proposed changes will boost the value of the operators. That will depend on the deals they strike with the Government over passenger subsidies.

Arriva is expected to cede Northern England to FirstGroup and it may also surrender its Merseyside route to a local authority, bowing out of the UK rail industry altogether. It rose 19 1/2p to 312 1/2p.