The government took over the operation of the East Coast Main Line intercity service at midnight, bringing the National Express franchise to a close after less than two years. The Transport Secretary Andrew Adonis was being joined by Directly Operated Railways Chairman Elaine Holt for a tour of the route today.

DOR is the government's new holding company, which in turn owns the operator East Coast Main Line Company Limited. DOR Chairman Elaine Holt insisted yesterday that the change did not amount to 'renationalisation'.

She said premiums would continue to be paid by the operator, but declined to reveal the details. However, she has said they will be "nothing like £180 million a year". National Express had contracted to pay £1.4 billion over the seven year, eight month franchise.

Meanwhile Lord Adonis said the change of ownership is not just a "care and maintainance job". He went on: "I want to see real improvements in the service and better value for money. East Coast staff have real pride in their jobs; they want to offer a fantastic service, and the new company will give them the tools for the job. This is a profitable railway – it needs to be the pride of its passengers and staff too and that's my aim for East Coast.”

Some of the changes already announced include the abolition of reservation fees from January, and also the scrapping of previously firm plans to install automatic gatelines at York. More than £12m is to be invested in station improvements, and catering policy is to be reviewed again. National Express controversially abolished most restaurant cars at the start of this year, replacing them with at-seat meals in First Class on all but a few peak-time trains.

National Express is still the operator of c2c and East Anglia, but it's being reported that a East Anglia three-year franchise extension will not be awarded. Opinions continue to differ on whether 'cross default' clauses can be exercised to strip NX of these contracts as well. 

NX Group is now in the throes of trying to raise cash with a new rights issue worth £360m. Its Deputy Chairman Jorge Cosmen is opposing the offer. His family has a stake of 18.6%, but withdrew from a bid to acquire the Group last month.

Other NX operations are continuing, and the company is trying to convert some of its lost rail market to road: former National Express East Coast customers are being offered a 50% discount on their first coach booking.