THE competition to run future East Coast Mainline services yesterday began in earnest with four companies battling it out for the right to succeed GNER.

The Department for Transport (DfT) said four firms had been formally shortlisted to submit bids for a new franchise contract - by Arriva, First Rail, National Express and Virgin/Stagecoach.

The winner of the competition is expected to be announced in the summer with the new franchise beginning in late autumn.

The route, linking London, Yorkshire and the North-East with Scotland, is currently being operated on a temporary management agreement by GNER until a new operator is found.

Its previous contract was scrapped in December after parent company Sea Containers said it could not meet the financial commitments required of it.

Sir Richard Branson, the founder of the Virgin Group, which is submitting a joint 50:50 bid with Stagecoach, said: "We will put in a strong bid that is highly competitive, deliverable and will offer lasting improvements to millions of customers."

Richard Bowker, chief executive of the National Express Group, said it was delighted to have reached the next stage of the competition and promised a "truly world-class railway".

He said the firm wanted to speak to as many people as possible to hear what they wanted from the railway.

GNER said it had been approached by some of the bidders and hoped to collaborate with the winner.

It is thought a bidding war may break out between rival potential operators to secure GNER's senior management team, who could pass on their expertise when it comes to the route and act in a future advisory capacity.

A GNER spokesman said: "We were approached by several potential bidders who wanted to team up with GNER, recognising our management expertise, knowledge of the route and high service standards.

"We remain in active discussions with shortlisted parties and have no intention of standing on the sidelines."

The spokesman said it was hoped the GNER brand would live on in some way, even though the company is likely to cease to exist once a new company begins operating the line.

He said: "GNER is a very well respected and successful brand and there would be lots of reasons for retaining it.

"However, that will ultimately be down to a decision between the successful franchise bidder and the DfT."

What the North wants from rail franchise

THE Department for Transport is expected to issue a detailed "invitation to tender" document next month which will act as a final specification for the franchise.

This is based on the department's own proposals and responses gathered from a public consultation, which ended earlier this month, and will be used by companies bidding to win the contract.

So far, the department has not gone beyond detailing the length of the franchise - seven years and five months - and stated that existing services will remain in place.

It also has asked that future fares are set in a manner "consistent with Government policy" and that new opportunities are examined to offer passengers new ticketing products.

Recently, three of the region's most powerful strategic bodies, the North-East Assembly, regional development agency One North East and the Association of North-East Councils set out their objectives for the franchise.

In a detailed submission, they asked that:

* Half-hourly services are maintained between Newcastle and London along with a similar frequency of service to and from Darlington;

* A "clock face" timetable is introduced with regular departure times each hour, making it easier for passengers to remember, and tying in with service patterns of Cross Country and TransPennine Express trains;

* A commitment is given to planned improvements to upgrade Newcastle and Darlington stations at the earliest opportunity;

* Smaller stations are not overlooked, such as Northallerton and Berwick-upon-Tweed, with athe number of stops at these being maintained or improved;

* Effective and efficient connections continue to be maintained at key "hub"

stations within the region, such as Newcastle and Darlington;

* In terms of catering, a minimum buffet/trolley service on all trains should continue with a full restaurant facility on the main business trains of the day;

* Existing franchise call centre facilities in Newcastle be retained;

* Online and advance ticketing should be made easier for customers who need to change trains or operators and, more broadly, ticket prices made accessible to a range of passengers;

* The current amount of car parking provided at GNER-operated stations is maintained and details provided of anticipated parking charges. Parking availability close to stations should also be explored along with park and ride schemes and integrated train/bus fares;

* Facilities for maintaining rolling stock at Heaton, Newcastle, be retained and improved.

Councillor Alex Watson, chairman of the North-East Assembly, said it wanted to ensure that the needs and aspirations of the North- East were fully considered by bidders when preparing their final tender applications.

He said: "We are looking forward to continued dialogue and consultation with the short listed bidders and Department for Transport throughout the re-franchising process."

Yesterday, independent rail consumer watchdog Passenger Focus set out its demands for the franchise and warned that big price increases should not be part of any future financial model.

Passenger link manager Guy Dangerfield said: "Passengers want the new operator to build on the level and quality of service currently provided.

"Our autumn 2006 National Passengers Survey shows that 87 per cent of Intercity East Coast passengers are satisfied with the service - the new operator must take that into the 90s."