Dutch win new Northern rail franchise

Foreign influence over Britain's railways increased yesterday after a consortium including the Dutch state railway was named as the preferred bidder to take over the new Northern passenger franchise.

The joint venture between Ned Railways and Serco was selected by the Strategic Rail Authority in preference to FirstGroup, one of the two incumbent operators on the franchise through its First North Western train operating company.

This is the second success for the NedRail/Serco consortium. A year ago it was selected to take over rail services in the Merseyside area from the incumbent operator Arriva. Overseas rail operators are already involved in the running of the Southern and Thameslink franchises and they are also among the consortia bidding for the new Integrated Kent franchise and the East Coast Mainline. The Danish state railway is bidding on its own for the East Coast and in partnership for the new Kent franchise while the German railway Deutsche Bahn has joined up with Virgin and Stagecoach to bid for the East Coast route.

The new Northern franchise will have about 46 million passengers a year and revenues of £350m, and will provide local and regional services across a wide stretch of Northern England taking in the urban conurbations around Leeds, Liverpool, Manchester, Newcastle and Sheffield. The franchise will start this autumn and last for up to eight years and nine months, the last two years depending on whether performance targets have been achieved.

Arriva was dropped from the shortlist of bidders for Northern last December along with a joint venture between RATP of France and Transdev, turning the contest into a two-horse race.

This is the eighth time that an incumbent operator has failed to retain a franchise or been selected for an enlarged franchise where it was already the dominant operator. An SRA spokesman maintained, however, that it did not have a bias against incumbent operators. "We hold a competition, take an in-depth look at the bids and select the best one," he said.