The decision follows MTR's announcement on June 16 that it will form a joint venture with First Group to bid for the new South Western franchise, which starts in June 2017.
The two remaining bidders for the West Midlands franchise are Govia subsidiary London and West Midlands Railway and West Midlands Trains, a wholly-owned subsidiary of Abellio Transport Group with East Japan Railway Company (JR East) and Mitsui as minority partners.
An invitation to tender is due to be issued to the two candidates by the Department for Transport (DfT) next month and the contract is due to be awarded in June 2017, with the new franchise starting in October 2017.
The West Midlands franchise is currently operated by London Midland, a joint venture between Go-Ahead (65%) and Keolis (35%). The franchise carries around 64 million passengers per year and covers an 867km network with 146 stations, encompassing suburban and regional services radiating from Birmingham as well as suburban, regional and inter-regional services from London Euston to Milton Keynes, Northampton, Birmingham, Crewe, and Liverpool via the West Coast Main Line. London Midland has operated the franchise since November 2007 and was awarded a two-year interim franchise last December.
