TRANSPORT minister Kim Howells has called for a new city partnership to establish York as a world-class rail centre.

Speaking as he prepared to visit GNER's control centre in the city, Mr Howells said York needed to understand the "strength of its assets" if it was to ensure a prosperous future in the rail industry.

Mr Howells, whose visit to York was the culmination of a two-day trip across the North East, said a partnership of the council, the university and industry leaders would be necessary if the city wanted "to develop a future as a centre of railway excellence".

He said: "When you think of areas associated with the railways, you think of York. It has a great reputation and I would like to see it take a step forward and go to a stage higher

"It could be seen as an area of cutting-edge development. Why should anywhere else on the face of the earth become the location for the best minds to be working for the future of rail than York?"

Mr Howells, minister for transport since June, also praised GNER as a flagship rail company in Britain. The York-based rail giant is set to have to bid again for its franchise when its two-year extension runs out in 2005.

Mr Howells said that although commercial competition was healthy, there may be some leeway for the Government rail watchdog, the Strategic Rail Authority, to extend GNER's franchise.

He said: "I understand the SRA has been talking to GNER and I know that the SRA is looking at re-categorising contracts in the future. I have been very impressed with GNER's management, its industrial relations.

"It is a world-class operation. It has been very successful in the face of some difficult circumstances."

Mr Howells added that GNER may also have played a role in Network Rail's decision, earlier this year, to take rail maintenance controls back in-house.

He said: "The derailment of a GNER train at King's Cross (due to maintenance problems on the line administered by York company Jarvis Rail) was one insult too far."

Updated: 10:41 Wednesday, December 03, 2003