NATIONAL Express will take over the East Coast Main Line rail service from GNER from early December.
The transport group - which already runs c2c and One Railway - beat off opposition from First Group, Arriva and a partnership between Virgin and Stagecoach for the prestigious London to Scotland franchise.
GNER has run the East Coast Main Line Services since 1997 and again clinched the franchise in 2005, but the Government intervened to re-tender the deal after its parent company Sea Containers filed for bancruptcy protection in the US.
GNER also had to pay the Treasury a total of £1.3 billion in premiums during the life of the franchise, but revenues failed to match expectations.
National Express will pay the DfT £1.4 billion during the franchise, which will run until March 2015.
Under the deal, the operator will be expected to deliver faster journey times, with London to Leeds services taking two hours, as well as more London to Edinburgh trains with journeys lasting four hours 20 minutes.
National Express has committed to ensuring that nine out of 10 trains run on time, as well as environmental benefits such as reducing fuel consumption per passenger kilometre by 28 per cent over the life of the franchise, and investment in four ''green'' stations.
Rail minister Tom Harris said: ''There is provision in this contract for extra services and fewer delays. National Express will also invest in stations and on-board services.'' National Express said unregulated fares are likely to rise by an average of retail price inflation (RPI) plus 2.1 per cent a year during the franchise.
Anthony Smith, chief executive of customer watchdog Passenger Focus, said: ''The commitment to improving services is a key passenger concern but represents a significant challenge for the new operator and for Network Rail to get from where they are today.'' "The longer-term plans to provide more seats and more services should be pursued with vigour.
''However, we remain concerned at the accumulative affect of year-on-year unregulated fare rises way above inflation.''
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