The previous National Express chief executive, Richard Bowker resigned in July, after it became clear the company couldn't afford to run the lossmaking East Coast railway line between Edinburgh and London, which was renationalised last month. By taking the franchise back from National Express and holding it for more than a year the government is losing out on payments of £179m due under the contract in 2010/2011, putting further strain on a state rail budget that is already pumping an estimated £500m into struggling franchises in the form of revenue support over the next two years.

The franchise will be owned by a new company called 'Directly Operated Railways', whose chief executive is Elaine Holt, former head of the First Capital Connect franchise. "DOR will be responsible for the East Coast main line operations and will then continue to manage the franchise until it is re-let again to a new private operator – anticipated in mid-2011."

National Express has £1bn of debt and was forced to go to shareholders for a £360m rights issue two weeks ago. But the financial crisis has sparked a dispute with NX's majority shareholder and deputy chairman Jorge Cosmen, who campaigned against the equity-raising attempt on the grounds that the amount sought was too large and the business lacked a well-defined strategy.

Mr Cosmen feared National Express would be sacked from the rail business when Lord Adonis, UK transport secretary, threatened to take back two remaining train franchises - C2C and East Anglia - as a penalty for withdrawing from East Coast. In the event, Adonis pulled his punches, allowing National Express to retain the contracts until they expire in 2011.

National Express has been subjected to three takeover bids, two of which Mr Cosmen supported.

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Business big shot: Dean Finch

The Times: December 8, 2009
Angela Jameson

Dean Finch, chief executive, Tube Lines

Rail commuters will be familiar with the problem. You are strap-hanging on the 5.45 when you spy an empty express train pulling into the platform opposite. Do you make a run for it and risk missing both of them? Or, worse, do you make the express train, only to find that its crew has gone AWOL and the engine will not be leaving the station any time soon.

Such a dilemma faces Dean Finch, chief executive of Tube Lines, London Underground's maintenance company — indicating the dearth of management talent in the transport sector.

It is only six months since Mr Finch jumped from FirstGroup, where he was chief operating officer and tipped for the top, to Tube Lines, where he got to run his own show for the first time. Now another rail and bus company — National Express — wants Mr Finch to be its chief executive and an announcement was expected this week to say that he had jumped fenders. But David Begg, chairman of Tube Lines, has decided to put up a fight. Mr Begg said yesterday that his chief executive was still considering the National Express approach and would make a decision over the next week.

Mr Finch, known for being a details man and razor-sharp, trained as an accountant with KPMG before joining First nine years ago. He quickly made himself essential to Sir Moir Lockhead, the chief executive, and was rewarded with a year’s spell in America, where he integrated the Laidlaw bus and coach business, FirstGroup’s $3.5 billion acquisition that propelled it into the top tier of global private transport operators. However, such was his influence on the British company that there were concerns that operational difficulties, particularly on First Great Western, could mount while his time was taken up elsewhere.

When he returned from the United States, he became First’s chief operating officer and was expected to take over from the 64-year-old Sir Moir. But Mr Finch, approached by Tube Lines last year, decided not to wait.

Too clever to be a bruiser, according to one industry insider, but also someone who does not suffer fools, he would relish the challenges that steering National Express would pose. However, the fact that the troubled transport group is likely to be a rail operator for only another two years may have made him hesitate, so keen is he on the railways. His track record goes back a long way, having worked on the privatisation of the industry and the rail franchising model at KPMG.