GWR bidder unveils plan for extra trains

Rail privatisation: Outsiders emerge as clear favourites but still face pitfalls in franchise battle

Resurgence Railways, the new rail company that is set to win the franchise to run InterCity services out of Paddington, is planning to increase the number of trains in an effort to win passengers back to rail.

The emergence of Resurgence as the favourite to take over the Great Western Railway is the surprise of the first group of three franchises which are due to be allocated next month. The company is led by a group of managers including former Trafalgar House finance director John Ansdell. Resurgence is the preferred bidder - having beaten off a management buyout team - and has until the end of next week to submit the final terms of its bid.

Mr Ansdell shared a pounds 1.3bn pay-off with two colleagues when they left Trafalgar nearly two years ago, and he has teamed up with Mike Jones, a former BR area manager at Leeds, and Richard Morris, safety director of Eurotunnel. Mr Jones, the vice-chairman, is known in rail circles as an experienced manager who was highly critical of the high freight prices charged by BR when he was in charge of petroleum movements on rail.

Resurgence is thought to require more subsidy - currently BR requires pounds 51m for the service - than the rival bid but has put forward a series of innovations that attracted the support of the franchising director, Roger Salmon. It wants to run more trains from distant parts of the network in Wales and the West directly into London by splitting up the existing eight- coach InterCity 125 high-speed trains into two.

The company also wants to re-establish direct services to London on routes that currently require a change to reach the capital. One insider said: "The MBO team were offering nothing new, and Resurgence came along with an exciting new package, adding to what is already a very good service."

Nevertheless, the bid faces several pitfalls. Adding trains beyond the number required by Mr Salmon means that the track access charges from Railtrack will increase.

There are also additional costs in splitting the high-speed trains because they will need a new trailer at the rear. But the team is confident that with fares being restricted to the rate of inflation and less under the new financial regime imposed by the Government, extra passengers will be won back to the railways.