Four train operators have been shortlisted in the competition to run one of London's biggest commuter franchises.

National Express, Stagecoach, Govia — a joint venture between Go-Ahead and Keolis — and Ned Railways, the Dutch operator, will fight for the new South Central franchise, which combines the former Southern railway routes with the Gatwick Express operations.

The franchise competition is the only one taking place this year and is expected to be keenly contested. Southern railways is currently run by Govia, which is confident that it will be able to retain the franchise.

The successful bidder will be asked to place a £30 million performance bond and a £25 million season ticket bond with Department for Transport (DfT).

In 2006/07, Gatwick Express and Southern combined collected more than £400 million in revenue and accounted for more than 140 million passenger journeys, but a DfT consultation on the new franchise said overcrowding remains a problem on peak-time trains.

The eventual winner of the South Central franchise will operate trains in south London and parts of Kent, Sussex, Surrey and Hampshire and will have to increase capacity by around 10 per cent overall.

The new operator will also help facilitate the East London Line Extension from 2010 and the £5.5 billion Thameslink Programme, both of which will provide a significant increase in capacity in London.

The successful bidder is expected to be announced in early summer 2009 and the franchise will operate from September 2009 until July 2015, although the DfT can decide to extend the franchise for up to two years, depending on performance levels.

Other improvements that the DfT wants to see delivered from the new franchise include smartcards — like the capital's Oyster card — rolled out throughout the franchise area.

It also wants to see improvements to stations to make them safer, later running services, improved reliability and better environmental performance.

Brian Souter, chief executive of Stagecoach, said the group was delighted to have been shortlisted for a franchise that is critical for the communities and economy of the South East.

“Our experience in running the UK’s biggest commuter rail franchise at South West Trains and attracting new leisure passengers will give us a strong platform to develop innovative and environmentally sustainable plans for the South Central franchise," Mr Souter said.

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