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Last Updated: Wednesday, 28 April, 2004, 09:00 GMT 10:00 UK
First on track for ScotRail bid
ScotRail runs regional services and sleeper trains to London
The transport operator, First Group, has been given the green light to press ahead with its bid for regional train services operator ScotRail.

The Competition Commission said it felt a takeover of the Scottish rail franchise by First could result in a "substantial lessening of competition".

But the watchdog believed conditions could be imposed on First which would be likely to offset the disadvantages.

Arriva and current ScotRail operator National Express have also put in bids.

Raise fares

The Office of Fair Trading referred First's bid to the commission amid concerns that First already had extensive bus operations in Scotland, particularly around Edinburgh and Glasgow.

The commission was concerned that First would be able to introduce ticketing and bus information practices that would favour its own services against those of its rivals.

The company could cut bus frequencies, raise fares or change routes in order to move people from bus to rail.

The takeover would also create a large public transport network operator accounting for a large share of all revenues from public transport in Scotland, it added.

First buses
First runs many bus services in Edinburgh and Glasgow
Professor Paul Geroski, the chairman of the commission's inquiry group looking at the potential takeover, said it did not believe that improved competition would solve the problem.

He said the commission would consult on ways to limit First's ability to raise prices, cut service frequencies, change last and first bus times or launch other anti-competitive practices.

First already runs the First Great Western, Transpennine Express and North Western rail franchises.

Its Great Western contract was recently extended and expanded to include Thames Trains services.

'Workable solution'

In addition to ScotRail, it is bidding to take over the East Coast Main Line franchise from Great North Eastern Railway (GNER).

However, First lost out in its bid for the new Greater Anglia franchise, which was taken over by National Express on 1 April.

The company said on Wednesday that it welcomed the commission's findings and was due to meet officials to discuss potential remedies.

A spokesman added: "First hopes it will be able to engage constructively with the commission to find a workable solution."

The commission said the "substantial lessening of competition" caused by a First takeover of ScotRail could be expected to result in higher bus fares, poorer services and less choice for passengers on some bus routes, mainly in Glasgow and Edinburgh.

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