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Monday 02 April, 2001

Strategic Rail Auth

East Coast Main Line

Strategic Rail Authority
2 April 2001

                       East Coast Main Line

The Strategic Rail Authority today announced that it would establish a Joint
Venture to take forward the upgrade of the East Coast Main Line from London to
Yorkshire, North East England and Scotland.  The SRA will lead the Joint
Venture, whose members are expected also to include a project management
company, the future train operator, Railtrack and external investors.  The
Joint Venture is consistent with the objectives set out in the SRA's recently
published Strategic Agenda, and will remove the responsibility of managing the
East Coast Main Line upgrade and the burden of funding its costs from
Railtrack.  This fundamental change to the financing of the upgrade, compared
with the original franchise proposition, means that both shortlisted
counterparties will need to review their original proposals and indicate how
they could participate in the Joint Venture.  (The Counterparties are GNER
Holdings and Virgin Stagecoach.)  Subject to discussion with the parties, the
SRA will ask for their response by 17th April.  Following consideration and
consultation with Ministers, the SRA will then announce the preferred bidder
for the East Coast franchise.

SRA Chief Executive Mike Grant said:

'This major upgrade project is designed to provide extra capacity, reduce
journey times and increase reliability on the route.  It requires a public/
private partnership to provide the necessary resources.  As we said in our
Strategic Agenda, 'Railtrack cannot do it all, and the SRA needs to work with
Railtrack and others to line up the resources of management as well as
finance, needed to supply a safer, better and bigger system''.

'The East Coast Main Line upgrade will make a significant contribution to the
SRA's growth targets of 50% in passenger kilometres and 80% in freight
tonne-kilometres by 2011.  We think it right, in view of the introduction of a
Joint Venture structure, to invite the shortlisted bidders to review their
proposals, but today's announcement ensures that the East Coast Main Line
upgrade can be progressed to deliver increased capacity and alleviation of
bottlenecks on the route'.

The upgrade scheme follows on from Phase 1, the upgrade of Leeds station and
related works. It includes:

*  Phase 2                  Remodelling of Peterborough Station
   (completed by 2006)      New platform at London Kings Cross

                            Development of alternative freight lines to provide 
                            more capacity

                            -      between Peterborough & Doncaster via Lincoln

                            -      Doncaster - York

                            -      Northallerton (North Yorkshire)

                            -      Leamside Line reopening (Co Durham)

                            -      Additional track capacity, between Newcastle 
                                   and Edinburgh

*  Phase 3                 Hitchin flyover to relieve bottleneck, new flyover at
   (2008)                  Newark to replace flat crossing. Remodelling and     
                           flyover at Doncaster, and various power and junction 

*  Proposed Phase 4        Additional viaduct at Welwyn to relieve bottleneck.  
   (2010)                  Completing the four tracking between Hitchin and
                           Peterborough. Further power upgrades.

Note to Editors

1.        The sSRA announced in January 2001 that it was inviting consultants
to work on a detailed feasibility study into a High Speed Line concept.
Expressions of interest have been received for this work but it should be
noted that this is a completely separate project to the East Coast Main Line
upgrade joint venture.

For media enquiries please contact the press office on 0207 654 6339 / 6234 /
6387. Or visit the website on

                               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.


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