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Friday 02 March, 2001

Strategic Rail Auth

New West Country Franchise ..

Strategic Rail Authority
2 March 2001

                          Building a Better Railway:

                New West Country Franchise Attracts Large Field

The next step in the development of the Wessex franchise was taken today, as
seven parties passed the SRA's qualification process to submit proposals for
the new franchise, designed to meet the growing demand for rail services in
South West England.

The franchise has been designed to attract new investment and provide
management focus on the important interurban and local services in the West
Country, as well as improving cross country links between the region, Cardiff
and the South Coast.

The companies / consortia confirmed as eligible to submit proposals are:
Connex Transport UK Limited (owners of the South Eastern franchise and current
owners of South Central)

First Group Plc (owners of Great Eastern, North Western, and Great Western)

GB Railways Group Plc (owners of Anglia Railways)

Group 4 Falck Global Solutions Limited  (new to rail franchise operation)

National Express Group PLC (owners of nine franchises - Central Trains, Cardiff
Railway, Gatwick Express, C2C, Midland Mainline, ScotRail, Silverlink, Wales &
West, WAGN)

SBB Laing - a partnership between Swiss Federal Railways and John Laing
Investments Limited (Laing are the major shareholder in M40 Trains Limited,
which is the preferred counterparty for the new Chiltern franchise)

Stagecoach Holdings plc (owners of South West Trains and Island Line and 49%
shareholder in Virgin Rail Group Limited)

In addition, Virgin Rail Group Limited and First Group Plc will be separately
submitting proposals to add the Cornwall & Plymouth Business Unit to their
CrossCountry and Great Western franchises respectively, in competition with the
Wessex propositions for these services. Individual lines within this Unit might
be operated by locally based 'micro-franchises' - involving local interests
linked with a parent franchise operator - subject to safeguards protecting
safety, service reliability, and network benefits.

Mike Grant, Chief Executive of the SRA said:

'We have assembled a highly competitive field to bid for this exciting new

'I expect a keen competition to provide the best overall package of investment,
service enhancements and improved provisions for passengers, plus value for
money for taxpayers.

'In evaluating proposals for this franchise we will take into account the
potential benefits a neighbouring franchise-owner could add - however, a 'solo'
or 'free standing' proposal is just as likely to win.'

Prequalified companies will have 60 days in which to prepare detailed initial
proposals, following which a shortlist will be invited to participate further
in the replacement process.

Notes to editors:

1.      The sSRA announced on 23 November 2000 its intention to create the new
Wessex franchise by combining a number of Wales & West and South West Trains
services into the core franchise and creating separate management units for
Bristol and Cornwall local services.

2.      Key objectives of the franchise include increasing track capacity to
carry more frequent trains on the Waterloo-Exeter line to provide a better
alternative to the busy A303; a new business unit for the Bristol
travel-to-work area to encourage the franchisee to develop rail commuting and
cross-city services in the Bristol sub-region; provision of adequate capacity
to meet the needs of holiday passengers in the region and good connections with
inter city services; better access to rail services and a step change in
customer satisfaction with stations.

3.      Neighbouring franchises to Wessex include Great Western, Chiltern and
South West Trains.

4.      More details about the Wessex franchise, including a map depicting the
areas covered, can be found on the SRA website under News.

5.      On the 8 February 2001, the SRA agreed with National Express Group PLC
an extension of their existing Wales & West franchise agreement from 31 March
2001 to April 2004, to enable the transfer of the West Country routes contained
therein to the new Wessex franchise. The agreement contains provision for the
franchise to be terminated at an earlier date, as and when the new franchise
comes on stream.

          Media Enquiries: SRA Press Office 020 7654 6339/ 6294/ 6234

     Latest news and announcements from the SRA can be viewed on our website

                                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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