THE East Coast rail franchise looks set to be handed to two companies owned by the French state-run railway.
The competition to run train services between Edinburgh and London is expected to be won by Channel Tunnel operator Eurostar and sister firm Keolis, both controlled by France’s national rail company SNCF, after shares in rival British bidders fell dramatically.
First Group saw its value drop by £150 million and Stagecoach – which submitted a joint bid with Virgin – saw £33m wiped off its shares. East Coast has been publicly run since 2009 after National Express gave up the franchise and there has been strenuous opposition to reprivatising it.
It paid a record £235m back to the Government in its final full year as a “nationalised” company.
First Group has just lost the ScotRail franchise to Dutch-owned Abellio. Rail unions have warned French, German and Dutch state-run rail companies are making major inroads into UK rail services.