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Wednesday 30 November, 2005

Department for Transport

DEPARTMENT FOR TRANSPORT ANNOUNCES INTEGRATED K...

                           IKF STOCK MARKET STATEMENT

Stock Market statement

For immediate release: 07.00 Wednesday November 30th 2005


DEPARTMENT FOR TRANSPORT ANNOUNCES INTEGRATED KENT FRANCHISE

THE DEPARTMENT FOR TRANSPORT today announced that Govia has been awarded the
contract to run the Integrated Kent franchise (IKF) from 01 April 2006.

The IKF will include routes on the national rail network currently operated by
South Eastern Trains throughout Kent, parts of East Sussex and South East
London.

It will also include new high speed commuter services from St Pancras making use
of the Channel Tunnel Rail Link (CTRL) from 2009.

The franchise contract is for 8 years with the final 2 years dependent on
service performance achieving preset targets. The total subsidy for IKF is £585m
over 8 years.

The franchise area has already benefited from almost £700 million in investment
on new rolling stock and improved infrastructure.  £250 million will be invested
on new high speed trains for CTRL.

Given investment in the region the new operator will increase fares by 3% above
inflation from January 2007 for five years to ensure there is a fair balance in
cost between the taxpayer and fare paying passenger.

Govia has also committed to:

  ·    Invest around £76 million in passenger and staff facilities.

  ·    Oversee the construction of two depots in East Kent to maintain the new and
     existing fleet of trains.

  ·    Improve performance with all day PPM train performance of 91.6% by March
     2010 and 93.74% by March 2014.

  ·    Provide services which are additional to the base line DfT asked for in the
     ITT, including a strengthened half-hourly service to Beckenham Junction to
     Victoria, an additional peak service between Faversham and Cannon Street, two
     additional peak trains between Ashford and Charing Cross and some extra mid-
     evening and late evening trains to suburban and Kent destinations from London.

  ·    Run services to Dover if safety concerns at the Shakespeare Tunnel can be
     overcome.

ENDS

Notes to Editors:

  1.   The incumbent operator is South Eastern Trains (SET), a subsidiary of the
     Strategic Rail Authority (SRA).  Following the termination of the Connex South
     Eastern Franchise on 9 November 2003 SET has run services across the region.

  2.   The four parties invited to bid for IKF were South Eastern Railways Ltd (a
     joint venture between DSB International and Stagecoach Group); First Kent
     Integrated Railways Ltd (FirstGroup plc); Great South Eastern Railway Limited (a
     joint venture between GNER Holdings and MTR Corporation) and London & South
     Eastern Railway Ltd (a joint venture between Go-Ahead Group and Keolis).

  3.   The total subsidy for IKF is £585m over 8 years. Year by Year values will
     be published shortly, once all the bidders who bid for IKF have been de-briefed.
     We anticipate publication of the annual subsidy amounts in mid-December.

  4.   On 27 October 2004, Alistair Darling announced Hitachi as the Preferred
     Manufacturer to build new high speed trains to operate on the IFT.  The order is
     expected to be for 28 6-carriage trains to be introduced in 2009.

  5.   It is appropriate for the new franchisee to have the opportunity to review
     proposals on changes to ticket office hours on the SET network.  It is expected
     that discussions amongst interested parties will take place in due course.

  6.   For further information, please contact the Department for Transport press
     office on 020 7944 3108.