NATIONAL Express has been given a two-year reprieve on its London to Tilbury and Southend rail franchise, which was due to expire next May reports the Press Association.
The transport group got into hot water with the Labour government when it returned its loss-making East Coast franchise into state hands in November 2009.
Coalition Transport Minister Theresa Villiers described the deal to leave the C2C franchise in National Express’s hands as a ‘short extension’ before it was relet ‘on a longer-term basis’ in 2013.
But the good news about the franchise – which includes providing services for the 2012 London Olympic Games – comes at the end of an improved year for National Express.
It was hit badly in 2009 by the loss of its East Coast rail franchise, for which it overbid before the recession struck and crippled revenues. Last year also saw it raise £375m from shareholders in order to reduce a £1bn debt mountain.
The group has since led a revival, recently raising full-year profit expectations as moves to revamp its bus network paid off earlier than expected, while its rail business also saw a 7% rise in underlying revenues during the fourth quarter.
In September the Coalition government gave it a 28-week extension on its only other rail franchise, East Anglia, beyond the expiry date of March 2011. Labour had previously refused this.
Theresa Villiers said: ‘We are currently working to develop recently announced plans for longer, more flexible, more efficient franchises which are more responsive to passengers’ needs.
‘This short extension ensures passengers will continue to enjoy good services on this important commuter line and means the positive changes we are developing will inform plans to re-let this franchise on a longer-term basis in 2013.’
Dean Finch, chief executive of National Express, said he was ‘delighted’ at winning the C2C extension, which has seen it make commitments on additional train services and staffing during the 2012 Olympics.
‘We are resolute in our commitment to customer service and are determined to continue delivering the highest standards of train service performance, reliability and customer satisfaction,’ he added.
National Express shares rose on the C2C announcement in early trading, but have since slipped 1.8p to 243.2p.
The C2C service runs 357 trains each weekday, carrying 29.6m passengers a year. It holds the record for the highest pu