The competition watchdog has cleared the takeover by National Express Group of the Greater Anglia rail franchise.

The Competition Commission said it had found the merger, which took place in April, would not cause a substantial lessening of competition on routes from London to Southend and between Peterborough, Cambridge and Norwich.

Greater Anglia was created from the former Anglia and Great Eastern franchises, which were both run by First Group.

As well as London-Southend services and the Norwich-Peterborough route, Greater Anglia - operated by National Express under the "One" branding - runs intercity services between London, Ipswich and Norwich and local trains in East Anglia.

The Competition Commission looked at the effect on competition of the takeover on routes where National Express already runs road coaches or train services through its other rail franchises.

The commission said it had looked at rail services between London and Southend, which National Express also runs on its C2C franchise.

It had also studied the potential impact on competition of National Express's control of the Greater Anglia and Central Trains franchises, which both run services between Peterborough and Norwich.

Commission chairman Professor Paul Geroski said it had found that the takeover would not lessen competition in any of the areas it had looked at.

It said that it had found there would be no incentive for NEG to raise coach fares or to reduce services in an effort to force passengers from coach to rail, since they would risk losing customers who would normally connect with other NEG coach services at their destination.

On Peterborough-Cambridge-Norwich, it said there were alternative bus services that competed with Central and Greater Anglia services.

On the Southend routes, the commission said NEG's ability to raise fares unreasonably would be limited by existing regulation and the fact that only a restricted number of passengers have a realistic choice between Greater Anglia and C2C services.

The Office of Fair Trading's announcement of the inquiry in May into the takeover caused controversy.

The Strategic Rail Authority questioned the amount of time the OFT had taken to initiate the inquiry, given that the SRA's decision to hand the franchise to National Express had been known for some months.

Rail watchdogs had criticised the SRA's initial decision, saying the proposed investment in the franchise by NEG was inadequate and that the previous operators of Anglia and Great Eastern had done a good job.

Friday September 17, 2004