A RAIL company which the Government was forced to renationalise three years ago is to be privatised again at the end of next year following increased profits.

Directly Operated Railways (DOR), the Governmentowned firm which took over running the East Coast Main Line franchise from National Express after the latter made a loss, said its operating profit increased by seven per cent in the year to March to £7.1m.

The firm, which trades as East Coast, reported a £20m increase in annual turnover to £665.8m, leaving a profit before tax and service payments to the Department for Transport of £195.7m, an increase of £13m.

The turnaround results mean the Government is seeking to put the East Coast Main Line franchise back into private ownership.

The first round of the bidding process was completed earlier this month, with the Government aiming to have the new private operator in place by December next year.

DOR chairman Doug Sutherland said the success had been a result of investment in infrastructure and training, adding: “During the year, we made further very good progress with the business turnaround of East Coast and continued to invest in our infrastructure assets, our people, and the delivery of significant improvements in customer service.

“Our assets have been worked harder and a solid financial performance has been achieved in a challenging economic environment.

“The major challenge in May last year was the introduction of a comprehensive timetable change across the entire East Coast network.

“Despite being the biggest change on the East Coast Main Line in 20 years – and ten years in the making by the industry – the new timetable was introduced seamlessly by East Coast. I want to thank everyone who helped to make that possible.”

DOR said there had been a major surge of 21 per cent in first class journeys during 2011-12, including a 31 per cent increase in first-class passenger journeys on Leeds to London services, 22 per cent from Newcastle to London, and 39 per cent increase on East Coast’s flagship London to Edinburgh route.

During 2011-12, 18.9 million passenger journeys were made with East Coast, a 2.1 per cent increase on the previous year.

“With ageing assets, operational performance continues to be a challenge for East Coast,” said Mr Sutherland.

“During 2011-2, however, we stepped up our close relationship with Network Rail to create further improvements, as their infrastructure failures also have a direct and considerable impact on the ability of East Coast to deliver to target – and that close co-operation is now starting to pay-off.

“We still have much more to do.

“The business plan for the remainder of the franchise during this year and next, will see the good work continuing, with the twin aims of ensuring a successful transfer of the business back to the private sector, in good condition, and maximising the value of the franchise achieved by the Government and the taxpayer.”