MAY 1 marks the start of a new 10-year contract to operate the UK's Inter-City East Coast franchise. The deal was signed on March 18 by Sea Containers' subsidiary Great North Eastern Railway, which has run the route from London to Leeds, York, Newcastle and Edinburgh since 1996.

The replacement franchise was hotly contested, with four consortia shortlisted for the final round: GNER, Virgin/Stagecoach, FirstGroup and DSB with EWS. The winning bid is based on premium payments averaging £130m a year, and assumes that revenue will increase by 8% a year throughout the life of the franchise.

The contract includes a break clause after seven years, with the final three dependent on GNER meeting performance targets. The company has committed to invest £125m, including £75m on refurbishing its diesel HSTs and expanding the fleet from 10 to 13 sets. £25m will go on station modernisation.

While some improvements are planned for Anglo-Scottish services, the emphasis is firmly on introducing a half hourly service to Leeds. GNER says London - Leeds 'is now the biggest long-distance rail market in the UK', with passenger numbers up by 30% in the last two years. The weekday London - Leeds service has increased from 37 trains a day in 1996 to 53 today, and could reach 80 by 2010. GNER will work with Network Rail to 'develop a £70m scheme' to electrify 24 km between Leeds and Hambleton Jcn on the East Coast Main Line, giving a second electrified route to the city.