BEG selected National Express as preferred bidder in February to operate the 272km network for 12 years from December 2018 using a fleet of new EMUs supplied by Škoda Transportation. However the incumbent operator DB Regio launched a legal challenge against the award and on September 17 the court instructed BEG to suspend the procurement until it could prove that financial performance guarantees were adequate. The total value of the contract is around €1.4 billion over the twelve-year term, equivalent to around €117m for the operation of 7.3 million train-km per year.

The court did not rule whether the financial guarantees offered were sufficient or not - but noted that they depended heavily on the revenues from National Express Rail's first German regional rail contract in North Rhine Westphalia, which began on December 13. The court also said that the financial guarantees of the British parent company could not be taken into account and ruled that BEG should scrutinise only the financial capacity of its German subsidiary National Express Rail Deutschland.

BEG subsequently appointed an auditor to analyse compliance with the OLG's legal opinion. "The analysis of the accounting firm shows that the financial performance of National Express is positive in the context of the provisions of the Munich regional high court," says BEG managing director Mr Johann Niggl.

BEG sent a letter to the unsuccessful bidders on December 16 informing them of its decision to award the contract to National Express. There will now be a mandatory appeal period, which means the deal will not be signed until January 4 at the earliest.

  • BEG also confirmed on December 16 that DB Regio has been selected as preferred bidder for a 12-year contract to operate the Nuremberg Diesel Network regional concession for 12 years from June 2019. DB Regio already operates these services, which are branded Mittelfrankenbahn, under a contract awarded in 2008. New trains will be procured to increase capacity on selected routes.