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Friday 27 June, 2003

Strategic Rail Auth

Statement re Rail franchise

Strategic Rail Authority
27 June 2003

                                                                    27 June 2003

            Strategic Rail Authority Terminates Connex Rail Franchise

•        Connex Transport UK Ltd has been placed on six months notice that their
South Eastern rail franchise will terminate no later than 31 December 2003.

•        Reasons for this decision include Connex's failure to meet a detailed
action programme of improvements which was a requirement before the SRA was
prepared to consider any increase in subsidy for the period 2004-6.  A 'Deed of
Amendment' previously signed with the company included this requirement,
alongside the provision of short-term financial stability for the franchise, its
passengers and staff during 2003.

•        The SRA is bringing forward the competition for a new 'Integrated Kent
Franchise', incorporating South Eastern services and the planned high-speed
domestic services on the Channel Tunnel Rail Link.  The competition for this
franchise will be advertised shortly and the winning private-sector company is
expected to take over within 12-18 months.

•        Once a handover date is agreed with Connex, the business will transfer
to an interim management company to be known as South Eastern Trains, acting on
behalf of the SRA.

•         Advisors to South Eastern Trains are First Class Partnerships.  The
Directors of the company are Nick Newton (Chairman), and Doug Sutherland.

SRA Chairman, Richard Bowker, reassured passengers, staff and other companies:

'It is business as usual for all passengers, and for the vast majority of Connex
staff.  This is a decision we have taken to protect taxpayers' money and
passenger delivery.

'The railway is a public/private partnership. We expect strong competition for
the new Integrated Kent Franchise, which we will shortly be putting out to
tender and which will bring early improvements for passengers.  In the meantime
we expect to work constructively with Connex to ensure a smooth transition.'

Notes to Editors

1.      The termination notice was given to Connex Transport UK at 18:00 hours
on Thursday 26 June 2003 to take effect on 31st December 2003.

2.      The Deed of Amendment for Connex South Eastern, and plans for an
Integrated Kent Franchise, were announced in an SRA Press Release dated 11
December 2002.

3.      First Class Partnerships is a leading railway consultancy that has been
retained by the SRA for such an eventuality.  Its Directors have extensive rail
management experience.

4.      Nick Newton is the SRA's Managing Director, Operations.  Doug Sutherland
is the SRA's Managing Director, Finance and Commercial.

5.      The SRA's duties to ensure continuity of services in the absence of a
franchisee are set out in Section 30 of the Railways Act 1993, as amended by the
Transport Act 2000, and the processes it should follow are described in specific
Directions & Guidance from the Department for Transport.

           For further details contact the SRA Press Office on 
                    020 7654 6339/ 6387 /6234/ 6862
                Or visit the website at

                      This information is provided by RNS
            The company news service from the London Stock Exchange            DLCDDGGXL                                                                                                                                                                                                                                                      

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