RAIL passengers face years of rising fares and more crowded carriages after a train company paid a record sum to operate the London-to-Edinburgh line.

GNER won the right yesterday to continue operating the East Coast Main Line until 2015, but only after agreeing to quadruple the fee it pays to the Government to more than £100 million a year. The company admitted it was likely to raise fares and make cuts to staff and catering to help to pay the fee. GNER is known for the quality of the food served on its trains but is planning to close restaurant cars at lunchtimes.

Passengers will have to wait another five years for punctuality to improve to 90 per cent from the current 80 per cent.

Only a fraction of the £1.3 billion GNER will pay the Government over ten years will be reinvested in the line, with the bulk spent propping up loss-making services elsewhere.

The Rail Passengers Council said that fares had risen sharply since privatisation and further increases were unacceptable when one in five long-distance trains continued to run late. “We are also concerned that the Government may abolish price controls on saver fares,” a spokeswoman said.

The Department for Transport is reviewing its fares policy and is expected to give private companies greater freedom to charge what they like. A saver return from London to Edinburgh, on off-peak trains, is capped at £90.60. An open return is £194.

Christopher Garnett, GNER’s chief executive, said: “We are in a very competitive market and would lose a lot of business to airlines if we put fares up 10 per cent.”

He said that GNER, which made £30 million profit in 2003, planned to raise revenue primarily by attracting thousands of extra passengers a day.

GNER has agreed to invest £125 million, including refurbishing its ten diesel high-speed trains and providing 900 extra car parking spaces and 400 more covered cycle parking spaces at stations.

The Government has refused to fund a series of upgrades to the East Coast line, including removing bottlenecks at Welwyn and Hitchin and replacing fragile overhead wiring.

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