THE news of National Express' success in the race to run East Coast Main Line services from the region to London and Scotland was largely welcomed last night.

National Express will take over the franchise from GNER on December 9 after it was chosen by the Department for Transport (DfT) ahead of rival bidders First Group, Arriva and a consortium of Virgin-Stagecoach.

The DfT's announcement was broadly welcomed, but doubts were expressed about the amount paid to secure the contract and the company's plans to raise unregulated rail fares, such as cheap day returns and long-distance open tickets, by an average of 2.1 per cent above inflation each year.

National Express, which also runs franchises in London and east Anglia, will pay the Government £1.4bn during the length of its contract - a million pounds more than GNER was supposed to pay - which will run up until March 2015.

The deal marks the end for GNER, which has run East Coast services since 1996, employing about 1,000 staff across the North-East and Yorkshire.

It had struggled to meet the financial demands placed on it by its existing franchise.

The franchise was eventually re-tendered after parent company Bermuda Sea Containers filed for bankruptcy protection in the US last year.

Rail Minister Tom Harris said there was provision in National Express' contract for extra services and fewer delays, while it would also invest in stations and on-board services.

He said: "Provided that National Express are committed to and deliver the performance improvements written into this contract, I do not think most passengers are going to have much to complain about."

Anthony Smith, the chief executive of customer watchdog Passenger Focus, said: "We welcome the announcement as it ends a period of uncertainty for passengers using East Coast services.

"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."

Mr Smith said he hoped longer-term plans to provide more seats and more services would be "pursued with vigour".

However, he said: "We remain concerned at the accumulative effect of year-on-year unregulated fare rises way above inflation."

Rebekah Gaze, a transport policy advisor with the North East Chamber of Commerce, said: "National Express has a strong record in running rail services and has committed to running a service comparable to that which was provided by GNER.

"This is vital as the East Coast Main Line is too important a route to be run as a budget service.

"What is of paramount importance is that prices remain competitive and cost-effective.

"The Government is encouraging people to use public transport instead of cars to ease congestion. It cannot, therefore, allow passengers to be priced off the railway."

North-East MP Alan Beith said he would seek an early meeting with National Express to discuss its plans.

He said: "GNER set a high standard of service. Our region needs that to be maintained.

"I am particularly concerned that National Express will be paying an even higher premium to the Government than the premium GNER found themselves unable to pay.

"I am also concerned at the potential increase in fares, although it is more limited than has been recently agreed for the cross-country routes in the North-East."

National Express had previously pledged to retain GNER's headquarters in York, but a question mark remains over its call centre in Newcastle, which does not form part of the franchise.

Brian Brock, a senior regional organiser for the North-East with transport union TSSA, which represents ticket office workers at GNER as well as some management, said he was reasonably optimistic about the prospects for the company's workforce and hoped there would be a seamless transition to the new company.

He said: "At the present time, we have had no indication that there is anything that we should be concerned about.

"The view is that we will sit down in the next few weeks and see what is happening.

"The proof of the pudding is, of course in the eating, but what I can say is that the management of GNER have done a good job in difficult circumstances over the past year or so."

GNER planned to take a ten per cent stake in the Virgin-Stagecoach bid had it been successful.

Its chief executive, Jonathan Metcalfe, said: "Naturally, we are disappointed that our joint bid was unsuccessful, but we now have to look to the future and work with the successful bidder to create an even bigger and better railway. The needs of our passengers will always come first.

"National Express will inherit a high-performing and fast-growing railway with fantastic staff and an enviable reputation for high service standards.

"Over the past 11 years, we have transformed this railway and built up considerable goodwill amongst passengers and our many stakeholders.

"We will do everything we can to ensure a smooth and professional handover."

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