Transport group Arriva has won a contract to operate rail services in southern Germany that could be worth £150m over the next ten years.

The bus and rail operator, which is based in Sunderland, will control services in Bavaria, southern Germany, near Munich, and close to the border with the Czech Republic.

The franchise will start in December 2007. Last year, the company acquired a 97 per cent stake in German rail group Regentalbahn AG.