Connex first to fall in the great franchise purge

French-owned train company has lost its licence, and industry insiders say South West Trains and First North Western will be next to go

A major purge of failing train companies began yesterday as Connex lost its South Central franchise and insiders predicted that more operators would face the axe.

A major purge of failing train companies began yesterday as Connex lost its South Central franchise and insiders predicted that more operators would face the axe.

Connex is expected to be one of at least three train companies to be stripped of their licences within the next 12 months. South West Trains (SWT) and First North Western (FNW) are understood to be among the companies targeted as part of a massive shake-up of the system.

Ministers are expecting Sir Alastair Morton to undertake a ruthless assessment of Britain's train operating companies in the wake of the Southall, Paddington and Hatfield rail disasters. The Government is keen that in the run-up to a possible general election next year, the authority is seen to be responding to the criticisms levelled against operators.

The French-owned Connex, which has faced constant criticism over late-running and packed trains, will have to give up its South Central service next year. The shadow Strategic Rail Authority (SSRA) has awarded the new licence, which includes some of the country's busiest commuter routes, to Govia, a consortium led by Go Ahead, owner of Thames Trains.

The franchise has been stripped from Connex South Central after a 31 per cent increase in passenger complaints. The operator is the first to lose its licence since the industry was privatised in 1996. Much to the frustration of commuters, Connex is entitled to retain its neighbouring south east franchise until 2011. While the SSRA acknowledged that Connex was forced to operate on out-of-date tracks with ancient rolling stock, it believed management did not do enough to look after its passengers.

In return for a 20-year franchise Govia, which involves the French firm SNCF, will invest £1.5bn in services, buying 400 new trains in the next few years and refurbishing stations throughout its network, most of which is in Surrey and Sussex. It has also undertaken that by 2005, nine out of 10 trains will arrive within five minutes of the scheduled time, rising to 15 out of 16 trains by 2010.

Operating under the name New Southern Railways, the group will upgrade services between London and Brighton as one of its top priorities. It has promised to install the Train Protection and Warning System, which automatically stops trains at red lights.

Keith Ludeman, the managing director of Govia, said improvements would be made to the Passengers' Charter, including compensation for delays and missed connections. He also hinted that peak fares could fall on some routes.

A Connex spokeswoman said the company was "very disappointed" with the announcement. She pointed out that Connex had pledged to spend almost as much on improving services as Govia.

The next in the line for the chop could be South West Trains which industry insiders believe has a record as unimpressive as Connex South Central. Owned by Stagecoach, SWT has a dismal reputation for cancellations and overcrowding. The authority is in negotiations over the franchise with Stagecoach and two other bidders. An announcement is expected early next year.

First North Western is also expected to lose its most lucrative services. The authority has announced that its long distance routes are to be stripped out into a separate franchise, which FNW is not thought likely to win.