Sea Containers Ltd

GNER Franchise Extended 2005

Sea Containers Limited
16 January 2002


Hamilton, Bermuda, January 16, 2002. Attached is a press release issued today
by GNER Holdings Ltd., a wholly owned subsidiary of Sea Containers Ltd. (NYSE:


For further information please contact:

Steve Lawrence at Public Relations and Communications, Sea Containers Services
Ltd., Sea Containers House, 20 Upper Ground, London SE1 9PF.

Tel: +44 20 7805 5830. E:mail: [email protected]


The attached press release contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. These include
statements regarding investment plans and similar matters that are not
historical facts. These statements are based on management's current
expectations and are subject to a number of uncertainties and risks that could
cause actual results to differ materially from those described in the
forward-looking statements. Factors that may cause a difference include, but
are not limited to, those mentioned in the press release, uncertainty of
negotiating and completing proposed purchase, sale or capital expenditure
transactions and their timing, inadequate sources of capital and
unacceptability of finance terms, inability of Railtrack to restore, improve
and maintain the U.K. rail infrastructure, capacity constraints of the U.K.
rail network, disruption of service patterns and timetables, seasonality and
adverse weather conditions, varying customer demand and competitive
considerations, and legislative, regulatory and political developments.
Further information regarding these and other factors is included in the
filings by the company with the U.S. Securities and Exchange Commission.


London, England, January 16, 2002. GNER Holdings Ltd., a wholly-owned
subsidiary of Sea Containers Ltd., announced today that its Great North
Eastern Railway (GNER) franchise has been extended by two years to April 2005.

GNER had earlier tendered for a new 20-year franchise, but it depended on an
upgrade to the East Coast Main Line (ECML) between London and Scotland. In the
event GNER's 20-year proposal was not taken forward by the Secretary of State
for Transport because of horrendous cost overruns on the West Coast Main Line
modernisation, the placing of Railtrack into administration and lack of proper
definition of the ECML upgrade, which vindicated the UK's Government's
decision to go for the shorter franchise at this time.

GNER's view is that the ECML infrastructure should become part of the
franchise, so the company can set priorities and fund investment in
partnership with Government, as this will lead to a much quicker upgrade at
much lower cost. GNER is seeking the support of other ECML users and will be
presenting its case to the Secretary of State before long.

In the three year period between now and April 2005, GNER has committed to
ensure that £83 million is invested, of which more than £50 million will be
spent by rolling stock owners on improvements to the train sets. All 302
coaches in the existing electric train fleet will be refurbished and improved,
all locomotives will be overhauled and upgraded to improve fleet reliability,
and the Train Protection and Warning System will be installed at the same
time. Six new rescue locomotives will be purchased for lease to GNER to
replace the existing antiquated and unreliable units.

All nine diesel trains will be lengthened by one coach to provide additional
train capacities. Sea Containers has already purchased 10 sleeper cars of the
same body type for possible conversion.

An extra train set will be leased from Eurostar (UK) Ltd and, together with
the other two such sets, will be operated on the London- Leeds route from
summer 2002. Following completion of the Leeds First project by Railtrack,
GNER's London-Leeds service will be almost half-hourly throughout the day.
Eleven additional daily services will be provided.

Improvements to coaches will include better seating, more space, improved
toilets, enlarged buffet area, more luggage storage, better public address
systems, and plug-in sockets for laptops.

Further investments will also bring:

Modernised stations:

  * A major station modernisation programme, including new passenger lounges
    and customer-friendly travel centres (at Peterborough, Doncaster and
    York), refurbished toilets and improved PA systems
  * Secure Stations status at all 12 GNER-managed stations (nine accredited
    at present)
  * Full access for people with disabilities
  * 450 extra car parking spaces and 350 secure new bicycle stands
  * 25 additional self-service fastticket machines

Improved information to passengers:

  * New staffed Customer Information Points at stations, offering real-time
    train running information
  * New information systems in station lounges, car parks, bars and
  * Better signage within stations and on approach roads
  * A new management disruption and communication centre at Kings Cross
    station to ensure that extra and more accurate information is given more
    quickly, if services are delayed

Better compensation for passengers: (from April 2003)

  * A 50 per cent single leg refund for delays of 45 minutes or more
  * A 100 per cent single leg refund if trains are over 90 minutes late
  * For the first time, season ticket holders will also be able to claim for
    each journey delayed, in addition to existing compensation provision

Mr James B. Sherwood, Chairman of GNER Holdings and President of Sea
Containers, said that he sees all these enhancements as a further step towards
improvement of GNER's services. He will be pressing for authority to order new
trains which are needed to accommodate expected passenger volumes, recognising
that new rolling stock cannot be delivered until after April 2005. He
indicated that the highest priority should be given to increasing pathways for
GNER and other passenger trains in peak periods.

Mr Christopher W.M. Garnett, Chief Executive of GNER, said that the unfolding
of events, starting with the Hatfield accident had been beyond all reasonable
expectation, but at least the problems of Railtrack, the infrastructure
provider, were now out in the open where they can be addressed. He thanked
passengers for their patience in this period and commended GNER's staff for
continuing to provide the best rail service in the UK, despite these


Note to Editors:

GNER's track record, since starting its original franchise in 1996, includes:

  * Over £40m invested in five years - more than double its original
    franchise commitment over seven years
  * 25% extra services in first four years
  * 30% rise in passenger numbers in first four years
  * 500 extra on-train staff
  * quicker and easier ticket purchase, via telesales, the GNER website, new
    fastticket machines and transformed travel centres
  * an awardwinning reputation for customer service and catering
  * consistently the highest passenger satisfaction scores of any
    long-distance train operator in the UK (85% in SRA's National Passenger
    Survey, December 2001).

For further information please contact:

Steve Lawrence at Public Relations and Communications, Sea Containers House,
20 Upper Ground, London SE1 9PF.

Tel: +44 20 7805 5830

E:mail: [email protected]