The rivalry between the two train operators bidding to run the East Coast Line was stoked up today as GNER's parent company Sea Containers slammed competitor Virgin.

The Bermuda-based company blasts Virgin in its annual report which predicts that GNER will keep the franchise for the main line through York.

Both companies have submitted bids to the shadow Strategic Rail Authority for the new franchise.

The report claims that the Virgin bid would cost the taxpayer more, would involve fewer improvements to stations and would result in higher ticket prices.

It says: "The flamboyant Virgin Group, GNER's only competitor for the new franchise, has proposed an ambitious alternative plan costing $10bn (£6.45bn).

"Their plan will not result in any more pathways or capacity into London than GNER's plan, yet will have an annual cost at least $700m (£451.9m) greater, which will have to be borne by the Government.

"Their plan provides substantially less improvement in stations and the total travel experience than GNER's. GNER has a reputation of delivering Britain's best long-distance railway, while Virgin has the reputation for delivering the worst.

"GNER and Virgin compete on many of the Scotland to London and intermediate city routes and to grant Virgin a monopoly would likely restrict competition and result in higher fares."

James Sherwood, company president, said he felt GNER would be awarded the franchise on comparative merit.

Sea Containers reported operating profits of $70m (£45.1m) in 1999 compared with $62 (£40m) in 1998. Will Whitehorm, corporate affairs director for the Virgin Group, was unmoved by GNER's comments: "Under no circumstances will we drop our East Coast main line bid," he said.

"Our East Coast main line bid complements our West Coast main line modernisation programme.

"We are train operators, not ferry operators."

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