THE bid deadline for the Edinburgh to London rail franchise looks certain to be extended after an 11th-hour intervention by the Treasury.
It is understood the two leading bids - from GNER, the incumbent operator, and DSB, the Danish state railway operator - are too close to call and a decision on a preferred bidder to run the franchise over the next seven years has been delayed after being scheduled for the middle of this month.
An announcement from the Strategic Rail Authority is not now likely until next month after the Treasury has examined the figures.
Sources claim the GNER bid is edging ahead for political and practical reasons. The prospect of Japanese-style bullet trains on the line, which forms part of DSB’s proposal, has been weakened with the revelation that the 140mph Hitachi locomotives will not be available until at least 2009.
The locomotives, based on Japan’s Shinkansen bullet trains, are still on the drawing board. An order placed last year for services between London and Kent will hit the rails in four years - more than half way through the east coast franchise.
One analyst cast doubts over whether the new trains, whenever they are delivered, would represent an improvement. Roger Ford, of Modern Railways, said: "The Japanese trains, which are electric multiple units with 20-metre long bodies, would not be a popular replacement for the 23-metre long luxury coaches in the present Inter City 225s."
GNER, headed by Chris Garnett, is popular with politicians and business groups, but faces tough competition from FirstGroup, a combined Stagecoach/Virgin consortium and DSB, which has teamed up with freight operator EWS.
FirstGroup is believed to have submitted a low-cost bid which could mean lower fares or a big increase in the £25m a year which GNER pays to the government.
But the Aberdeen company has a number of problems. Its bid has been hobbled by a Competition Commission inquiry which will not report until after the new franchise period begins in May.
Concerns that First’s low-cost approach may mean poorer quality services will have been heightened by its stewardship of ScotRail, which started in October. Scotland on Sunday last week revealed that complaints about Scottish railway services have rocketed by 40% since First took over.
A spokesman for the Scottish Council for Development and Industry, while refusing to back a particular bidder, said: "We believe GNER provides a good service for business. We are disappointed that the bid will be judged on cash rather than improvements to service."
Brian Souter and Richard Branson’s Inter City Railways consortium has promised better station facilities, improved trains and "innovative solutions" to deal with forecast passenger growth.
Their Virgin venture already runs the west coast main line and cross country services, giving it valuable experience and economies of scale. But surveys such as the annual National Passenger Survey suggest customers rate GNER more highly than existing Virgin operations.
DSB, the Danish operator, was considered an also-ran until last week’s revelation about the Hitachi trains. Neither DSB nor EWS has run passenger train services in the UK before, although the same might have been said about GNER’s owner, Sea Containers, nine years ago.
The competition authorities may cry foul if the Danish government, which owns DSB, were to underwrite an order for a fleet of bullet trains at £20m each. None of its private sector competitors could call on similar government support.
Ditching the current fleet of Inter City 225 trains would lead to a potential bill for hundreds of millions of pounds which would have to be borne by the east coast line operator, the government or the train leasing companies.
Officially, bidders for the east coast franchise are not allowed to talk about their bids. The Strategic Rail Authority was forced to issue a reminder to that effect in November, which makes last week’s revelation about bullet trains surprising.
EWS, which handles public relations for DSB in the UK, last week denied leaking the story. Rival firms are understood to be rubbing their hands at the prospect of the Danish interloper receiving a dressing-down from the SRA.
Rather than give away details of its bid, GNER has built a publicity campaign around its relative popularity. Footballer Alan Shearer has endorsed the operator, and a supportive motion backed by 43 MPs will be proposed in the House of Commons on Tuesday.
The east coast line passes through the constituencies of Prime Minister Tony Blair, Chancellor Gordon Brown, transport secretary Alistair Darling and election co-ordinator Alan Milburn, a feature which is seen as giving it particular political significance.