Virgin Rail must beat three seasoned rivals to retain a revamped franchise. The new-look Cross Country franchise includes services from Stansted airport to Birmingham and Cardiff to Nottingham, alongside established routes such as Penzance to Aberdeen - the UK's longest rail service.
It will compete against Arriva, National Express and First Group, the country's largest rail franchise operator, for a contract running from November 2007 until March 2016. The firm, which has increased the franchise from one that carried 12 million passengers a year to 21 million, said its nomination confirmed its "skills and experience" as a train operator.
The Department for Transport has reshuffled the Cross Country routes as part of an overhaul that will cut the number of rail franchises. Yesterday saw four franchises running in and out of the Midlands reduced to three. As well as the Cross-Country operation, the DfT also announced shortlists for the other franchises - east Midlands and west Midlands.
Arriva, First Group, National Express and Stagecoach will compete for the east Midlands service, which will run from November next year until March 2015. The franchise has also been overhauled and is formed by the current Midland Mainline service as well as the Liverpool to Norwich service. The west Midlands franchise, which will run until September 2015, will be contested by Hong Kong-based MTR, Govia and a joint bid by the services company Serco and Holland's NedRailways.
The closing date for bids for the franchises is February. A final decision will be made next summer. It comes against a background of increasing competition for franchises, which contributed to GNER's aggressive bid for the east coast mainline.
GNER is supposed to pay £1.3bn to the government under the 10-year franchise and is already struggling to meet revenue expectations. The DfT is also expected to announce the winner of the south-west franchise this week.