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Thursday 10 August, 2000

National Express

Stmnt re Franchise Agreement

National Express Group PLC
10 August 2000

                          National Express Group PLC
                Extension of Midland Mainline franchise to 2008

National  Express announces that it has agreed with the shadow Strategic  Rail
Authority  (sSRA) to extend its fast-growing Midland Mainline franchise  by  a
further two years to 2008.

The  agreement  is designed to increase and accelerate investment  in  Midland
Mainline  in  two ways. Firstly, the total franchise premium  of  £33m*  which
National  Express would have paid to the Government during  the  life  of  the
franchise  will now be invested directly into Midland Mainline.  Secondly,  in
return  for  the  two  year  extension, National  Express  has  undertaken  to
accelerate its investment in the franchise.

These  combined  changes  will deliver a package of service  improvements  for
passengers as follows:

- £22m  worth  of  improvements to stations  -  including  additional  car
  parking,  passenger  lounges, improved access, security  and  new  passenger
  information systems
- The  construction of East Midlands Parkway Station - a new, £17m  multi-
  modal park and ride facility for the East Midlands, which is expected to    
  open in 2002
- Increased train frequencies, faster journey times, new destinations  and
  higher punctuality targets through:
     -    A £60m investment by Railtrack in track improvements
     -    The introduction of 28 new high speed trains, worth £135m, which    
  will replace part of the existing fleet and increase peak-time capacity by  
  33% from 2004

National  Express will also establish a Customer Service Academy in  Derby  to
centralise and enhance training facilities for all customer-facing staff. This
will  provide  a  centre of excellence and establish standards  which  can  be
transferred  initially  across  all of its train  companies  -  and  then  the

Announcing  the  franchise terms, Mike Grant, Franchising  Director  and  sSRA
Chief Executive said:

'This  exciting new investment package is worth nearly £240m. It is  excellent
news  for passengers, who will benefit both from faster journey times and  new
rolling  stock.  This  substantial  level  of  investment,  coupled  with  new
performance targets, will ensure improvement in the quality of service on what
is  already regarded by passengers as a train operating company which performs

Phil White, Chief Executive of National Express said:

'This  is  a good deal for passengers, staff and shareholders and is  in  line
with  our  aim  to  make  public  transport the first  choice  travel  option.
Passenger volumes on the UK's rail network have grown by 30% in the last  five
years  and  are expected to increase by a further 50% during the next  decade.
Since  we  won the Midland Mainline franchise, we have shown that by improving
services  we can attract more passengers. For this to be sustainable the  rail
network  requires  substantial investment. With more of  our  rail  franchises
comprising  longer  tenures and having significant growth  prospects,  we  can
invest - and deliver train services which will meet passengers' real needs for
the 21st century.'

* Based  on  subsidy  premia foregone to SSRA that  would  have  been  payable
between 1/10/01 to 31/3/06 at current prices

For further information please contact:

Ray O'Toole, Chief Operating Officer (UK)
William Rollason, Finance Director
National Express Group                       020 7529 2000

Nicola Marsden/Steve Jacobs
Financial Dynamics                           020 7831 3113