History
The original InterCity East Coast franchise was awarded to Sea Containers who operated it from April 1996 until April 2005 trading as GNER. Sea Containers was awarded a new seven year franchise by the Department for Transport from May 2005 with a three-year extension dependent on performance targets being met. GNER committed to pay a £1.3-billion-premium to the Department for Transport over ten years.
However due to the financial problems caused by it having overbid as well as financial difficulties encountered by the parent company, in December 2006 the government announced it was stripping the franchise from Sea Containers and would put it up for re-tender, with GNER running the franchise on fixed fee management contract in the interim.
In February 2007 the Department for Transport announced that Arriva, First, National Express and Virgin Rail Group had been shortlisted to lodge bids for the new franchise.
In August 2007 the Department for Transport awarded the InterCity East Coast franchise to National Express. National Express committed to pay a £1.4-billion-premium to the Department of Transport over seven years and four months. At the time rail analysts had speculated that the Group had paid too much for the franchise. National Express East Coast commenced operations on 9 December 2007.
Read more about this topic: National Express East Coast
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