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Thursday 15 February, 2001

Strategic Rail Auth

SRA Shortlists W&B

Strategic Rail Authority
15 February 2001

                          Building a Better Railway:

SRA Shortlists Four for Wales and Borders Franchise

The next step towards establishing a new passenger rail franchise for Wales
and Borders was taken today as the Strategic Rail Authority (SRA) shortlisted
four parties to prepare Best and Final Offers.

The shortlisted parties are:

*        Arriva plc (franchisee of Northern Spirit and Merseyrail) in
conjunction with Connex Transport UK Limited (franchisee of South Eastern, and
also South Central).

*        FirstGroup plc (franchisee of Great Eastern, Great Western and North

*        National Express Group plc (franchisee of nine operations including
Wales and West, Cardiff Railway and Central Trains).

*        Serco Rail (division of Serco Limited, manage the Manchester
Metrolink and other rail technical services).

When let, the franchise will comprise most services currently operated within
Wales by the Wales and West, Cardiff Railways (ValleyLines), First North
Western and Central Trains franchises.

Mike Grant, SRA Chief Executive, said:

'This has been a very popular competition, with a good range of proposals
received.  I anticipate a tough competition to operate this new franchise, and
the SRA will be working hard to use that process to extract the best possible
deal for passengers.'

'The SRA has pressed hard over the past couple of months to separate those
services that will transfer to the new Wales and Borders franchise, and to
enable them to operate together from later this year as an interim
arrangement.  This is intended to simplify the transition for passengers and
staff, paving the way for the creation of the new franchise'.

Notes to Editors

1.      The Wales and Borders franchise was announced by the Shadow SRA on 8
August 2000.  It will embrace the following service groups, currently operated
by four different operators:

*         All of the services currently comprised within the Cardiff Railways
(Valley Lines) franchise.

*        Services currently operated as part of the Wales and West franchise
in Wales, from Cardiff to Hereford, Shrewsbury and Manchester and from Wales
to Birmingham, the West Country and London (Waterloo) via Bristol.

*        First North Western services to and along the North Wales Coast.

*        Central Trains services from Birmingham to (and within) Mid-Wales.

The franchise will include all stations in Wales, including those currently
operated by First Great Western, and those predominantly served by the new
franchise in the border counties, including the key stations of Chester,
Shrewsbury and Hereford.

Services currently provided by First Great Western, Virgin CrossCountry and
Virgin West Coast are not included.

2.      On 7 February the SRA announced that it had agreed terms with National
Express Group plc (NEG) on the restructuring of the company's Central Trains
franchise to separate Central Wales (Aberystwyth) line and Cambrian Coast
services for inclusion in the Wales & Borders franchise.

3.      On 8 February the SRA announced that it had reached agreement with
National Express Group plc (NEG) to extend their Cardiff Railway and Wales and
West franchises, from the current termination date of 31 March 2001 to 30
April 2004.  This is to ensure continuation of services until they can be
transferred to the new Wales and Borders franchise.   The agreement contains
provision for the existing franchises to be terminated early as and when Wales
and Borders comes on stream.

4.      A map of the new Wales and Borders franchise was published by the
Shadow SRA on 8 August 2000.  This can be viewed on our website, in the 'News' section.

                               Important Notice

This news release is issued by the Strategic Rail Authority and its contents
have been approved for the purposes of section 57 of the Financial Services
Act 1986 by KPMG Corporate Finance.

KPMG Corporate Finance is a division of KPMG which is authorised to carry on
investment business by the Institute of Chartered Accountants in England and
Wales. This news release has been prepared for general information purposes
only and is not intended to form the basis of any investment decision or
constitute an offer or invitation to bid for any passenger rail franchise or
to acquire shares in a train operating company. Neither this news release nor
any copy of it should be taken into or distributed in Canada, France, Japan or
the United States except in accordance with an applicable exemption. The
distribution of this news release in other jurisdictions may be restricted by
law and therefore persons into whose possession this news release comes should
inform themselves about and observe any such restrictions.

KPMG Corporate Finance is acting for the Strategic Rail Authority and will not
regard any other person as its client in relation to passenger railway
franchising or be responsible to anyone other than the Strategic Rail
Authority for providing the protections afforded to clients of KPMG Corporate
Finance nor for advising any other person on the contents of this news release
or any matter referred to in it.

       Media Enquiries:  SRA Press Office  0207 654 6339/6294/6234/6387

Further information and announcements by the SRA are contained on our website:


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