19/09/2006

Stagecoach Group plc (“The Group”) today welcomed the Department for Transport (“DfT”) announcement of shortlisted bidders for the new inter-city passenger rail franchises.

The Group is one of four pre-qualified bidders for the East Midlands franchise. Virgin Rail Group (“VRG”), in which Stagecoach Group has a 49% shareholding, is one of four shortlised bidders for the new Cross Country franchise. Both franchises will commence in November 2007.

Ian Dobbs, Chief Executive of Stagecoach Group’s Rail Division, said: “We are delighted to be given the opportunity to develop customer-focused bids that can deliver value to our shareholders.

“Stagecoach has an excellent track-record of high operational performance, innovation, value-for-money and increasing levels of customer satisfaction.

“The East Midlands franchise is an excellent opportunity to expand our rail portfolio by delivering improved services for passengers in a region of the UK with significant growth potential.

“VRG is in a strong position to build on its success in transforming the existing Cross Country franchise by further driving up performance, improving customer satisfaction and attracting even more new passengers to the country’s truly national rail franchise.

“We look forward to working closely and with local stakeholders and the DfT during the franchising process to maximise the opportunities for growth from these rail networks.”

ENDS

For further information, please contact:
Steve Stewart, Head of Media and Public Affairs, Stagecoach Group
Tel: 01738 442111 or 07764 774 680

Notes to Editors

Stagecoach Group is a leading international transport company with extensive bus and rail operations in the UK and North America.

The Group operates South West Trains, the UK's biggest commuter rail franchise, which runs nearly 1700 trains a day in the south-west of England out of London Waterloo. The Group also runs Island Line, the country’s smallest rail franchise.

Stagecoach is shortlisted for the new 10-year South Western franchise, which combines the existing South West Trains and Island Line franchises and runs from February 2007.

The East Midlands franchise will be formed from the current Midland Mainline franchise and regional services transferred from the current Central Trains franchise. It is planned that the franchise will run until 31 March 2015, the last year and 4 months of which will be conditional upon achieving pre-set performance targets.

Virgin Rail Group is a joint venture between Stagecoach Group and the Virgin Group of Companies. VRG operates the existing Cross Country franchise and the West Coast franchise.

The new Cross Country franchise takes in services on the current Cross Country franchise as well as those transferred from the current Central Trains franchise. It is planned that the franchise will run until 31 March 2016, the last 2 years and 4 months of which will be conditional upon achieving pre-set performance targets.