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May 7, 2009 12:01 AM

A senior Newcastle Liberal Democrat has expressed concern over reports that National Express East Coast may be obliged to give up its East Coast Main Line rail franchise on the grounds that the proposed £1.4bn franchise is economically unsustainable.

The news comes after former operator GNER was also obliged to give up the route in 2007 after it was unable to meet the financial terms of the franchise deal. It is being reported that the company will seek to continue to operate the route on a short-term management contract whilst the Government re-tenders the service.

Councillor Greg Stone, Parliamentary spokesman for Newcastle East, said: "The future of the East Coast Main Line is very important to the economy of the North East, which relies on a fast and high quality service to London and also to Edinburgh.

"However, there are growing concerns that the economic downturn combined with over-optimistic forecasts is making the current franchise system virtually undeliverable.

"Both GNER and National Express have delivered good customer service on a flagship route, but neither have been able to meet the repayment terms to Government.

"To lose one franchise operator might have been viewed as a misfortune but to lose two in two years looks like carelessness.

"I am concerned that the Government is imposing a financially unsustainable franchise system on operators.

"This is not good news for passengers who are faced with ever increasing fares, and it is not good news for long-term investment in the route's infrastructure.

"It also raises serious questions about the financial viability of the Government's plans to invest in new high-speed rail - if operators cannot make a success of operating the premier route on the existing UK network, what does this portend for the deliverability of a new high speed network?"