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England’s Strategic Rail Authority (SRA) recently advised Sea Containers Inc., which operates Great North Eastern Railway (GNER), that it had terminated proceedings to award a new 20-year franchise to operate the intercity services on East Coast Main Line. Instead, SRA wants to negotiate a two-year extension to Sea Containers’ GNER franchise.



SRA’s decision came as little surprise to Sea Containers President James Sherwood, according to a prepared statement. Following the October 2000 Hatfield accident, SRA learned that Railtrack, which is charged with maintaining England’s infrastructure, allowed the network deteriorate. Railtrack has since incurred massive debt trying to improve the network.



Sherwood believes Railtrack’s future role and funding requires new definition and until that’s done, it’s probably unwise to award long-term franchises.



SRA also advised GNER that it most likely will seek half-hourly service on the London-to-Leeds route starting in 2003, early refurbishment of the Intercity 225 fleet, increase in customer satisfaction and safety precautions, station upgrades and more spare locomotives to improve reliability.



GNER believes it also should order new rolling stock now to avoid overcrowding and reduce transit times. Generally, financial institutions require guaranteed long-term usage contracts for rolling stock purchases. The government has had the power to provide "backstop" guarantees to those who own or finance rolling stock in case a contract were to be terminated, but hadn’t exercised that right. Sea Containers believes the government plans to review that policy.



"The government has made it clear to us that it is not opposed to the award of a new long-term franchise and we will be seeking this once the upgrade of the East Coast Main Line has been properly defined and financed," said Sherwood.