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Thursday 08 February, 2001

Shadow StrategicRail

SRA Prepares for Future Wales

Shadow Strategic Rail Authority
8 February 2001

SRA Prepares for Future Wales, Wessex and Thameslink Franchises

The SRA has reached agreement with National Express Group plc (NEG) to extend
the Cardiff Railway, Wales and West, and the Great Northern services in the
West Anglia Great Northern (WAGN) franchises, from the current termination
date of 31 March 2001 to 30 April 2004.  This will ensure continuation of
services until they can be transferred to the new Wales and Borders, Wessex
and Thameslink franchises which are being negotiated under the SRA's franchise
replacement programme. The agreement contains provision for the existing
franchises to be terminated when the new ones come on stream.

Under the deal, NEG has undertaken to restructure its operations in
preparation for the new franchises.  It will combine the Welsh services of
Wales and West with Cardiff Railway services to form the core of the new Wales
and Borders; establish the remaining Wales and West services as the basis of
Wessex; and prepare WAGN's Great Northern services (from Kings Cross and
Moorgate) for transfer to the Thameslink franchise.

NEG has also agreed to reorganise its Central Trains services in preparation
for transfer of the mid Wales services to Wales and Borders at a time of SRA's

Over the remaining tenure periods, NEG has committed to maintain services at
levels in the 2000-01 timetable and has adopted improved customer service
commitments. Operating subsidies have been set at levels intended to reflect
the costs, responsibilities and risks involved in providing the services and
carrying out the restructuring process.

Notes to Editors

1.    The Shadow SRA announced in September 2000 that eight companies had
met the pre-qualification criteria to compete for the new Wales and Borders
franchise. The SRA expects to announce soon which of these companies have been
shortlisted for negotiation.

2.    The Shadow SRA announced in November 2000 that it was setting up a new
Wessex franchise and requested that interested parties come forward.  The SRA
expects to announce soon the companies that have fulfilled the prequalification

3.    The Shadow SRA announced in September 2000 that eight companies had met
the pre-qualification criteria to compete for the new Thameslink franchise,
which incorporates the Great Northern services in the current WAGN franchise.

        Media Enquiries: SRA Press Office: 0207 654 6339 / 6294 / 6324
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                               Important Notice

This news release is issued by the Franchising Director 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 Franchising Director and will not
regard any other person as its client in relation to passenger railway
franchising or be responsible to anyone other than the Franchising Director
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.


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