National Express to lose another railway franchise

London: Struggling transport operator National Express will be stripped of an eastern England rail franchise three years early, the government said on Wednesday.

National Express, which was the subject of takeover bids in recent months, said it was surprised, but not disappointed, by the government's decision.

The company will lose the East Anglia franchise on March 31, 2011, after defaulting this year on another major franchise, the East Coast Main Line.

Transport Secretary Andrew Adonis said the process for securing a new operator would start immediately to ensure a smooth transition for the service.

Earlier this week, the government also announced a bidding timetable for National Express' remaining rail franchise, which will change hands in May 2011.

Bob Crow, general secretary of the Rail, Maritime and Transport union, said the moves underlined the "continuing chaos of rail privatisation which is riddled with instability, uncertainty and crisis management."

"The sooner they and the rest of the money-grabbing train companies are kicked off our tracks for good, the better," Crow said.

National Express said that while the East Anglia decision was expected, the company was "disappointed given the excellent improvement in performance delivered by the group over the past five-and-a-half years of operating the franchise."

National Express — which also operates school bus services in 27 US states and two Canadian provinces, and is the leading private bus operator in Spain — is due to ask shareholders today to approve a £360 million (Dh2.2 billion) rights issue to reduce its £1.1 billion debt burden.

The company is going ahead despite the objections of one of its directors, Jorge Cosmen, whose family holds an 18.5 per cent stake.

Cosmen earlier had joined with CVC Capital Partners to explore a takeover bid for National Express, but announced last month that it would not make one.