National Express Group had been tipped to win the East Coast franchise after losing Silverlink, Midland Mainline and Central Trains to new franchisees and Gatwick Express to Southern. The new franchise will start operations on 9 December 2007 and run until 31 March 2015, with a boost in services promised for late 2010.

Over the seven and a quarter year term, NEG has committed to pay a hefty £1.4 billion in premiums to the Department for Transport. It has yet to name a top team to run the new franchise or to reveal what identity it will use.

National Express Group chief executive Richard Bowker said: “We are absolutely delighted that we have won the UK’s premier inter-city railway. We have won with a bid which is ambitious, deliverable and structured to generate shareholder value.

“Our combined strengths of industry-leading operational performance and excellent customer service give us confidence that we will be able to grow the business and increase the number of passengers by providing a service that is value for money and aimed at making travel simpler.”

Compared to the East Coast’s former franchisee, NEG appears to have a lesser commitment to investment – although re-engining of HST power cars will continue. And more than £7 million is to be spent on the 12 managed stations included in the franchise, such as Peterborough, Doncaster, York and Newcastle.

As to revenue, unregulated fares are expected to be increased at the rate of 2.1 per cent per year over the eight year life of the franchise. The timetable change in December 2010 could see up to 25 extra train services each weekday, an increase from 136 to 161 – including through services from London to Lincoln which will require diesel haulage – and extra London to York trains. Network Rail’s East Coast route utilisation strategy allows ‘five trains from King’s Cross in each off-peak hour – two to Leeds, two to Newcastle (with one continuing to Scotland) and a fifth train running in alternate hours to Lincoln or York.

NEG’s Lincoln and York trains will call at intermediate stations, replacing stops in longer distance services and allowing faster journeys between London and Leeds, London to York, and London to Edinburgh.

Existing rolling stock will be retained, with up to 40 more carriages procured to give an additional 14,000 seats each weekday.

Work to re-engine HST diesel power cars will also continue, while pre-series Inter City Express trains will be introduced from 2012 for testing.

Meanwhile, stringent performance targets have to be reached as a condition of retaining the last 17 months of the franchise. Environmental commitments include reducing fuel consumption per passenger kilometre by 28 per cent, designation of four ‘green’ stations and a £400,000 investment in reducing energy use at stations and depots. NEG will appoint an environmental manager, conduct an annual environmental audit and trial an electricity consumption meter to monitor energy efficiency of trains.

On board trains, Wi-Fi will be free in standard class and NEG says it will continue to provide a full restaurant service on 87 Monday to Friday trains (one less than GNER) with an improved range of full meals.

Rail watchdog Passenger Focus said its spring 2007 survey showed that 87 per cent of GNER passengers were satisfied with the service they received. “We hope to see the new operator scoring into the 90 percentages as soon as possible,” said a spokesman.

NEG could face a competition inquiry into its takeover of the East Coast franchise. Although the franchise does not coincide with other NEG rail operations it does run parallel to coach routes operated by the Group.

A spokesman for the Office of Fair Trading said it was routine for changes of this size to be considered for investigation, with the initial move being made by OFT, asking for views on the matter.

NEG said: “Our belief is the real competition on this route is cars and low-cost airlines.”