August 10, 2016 / 7:32 AM / 2 years ago

UPDATE 1-Britain's new government awards rail contract to Abellio

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LONDON, Aug 10 (Reuters) - Dutch-owned Abellio East Anglia has been awarded a renewed contract to run rail services in eastern England in one of the first such decisions made by Britain’s new government.

The deal included a 1 billion pound ($1.3 billion) contract for Bombardier to supply new trains from its UK base, and would cut journey times on routes between London and the eastern English cities of Cambridge and Norwich, the UK’s Department For Transport said on Wednesday.

Theresa May became Britain’s prime minister last month after Britain voted to leave the European Union in June. The new government has delayed some infrastructure decisions, such as Hinkley Point C, a plan to build the country’s first new nuclear plant in decades.

The award of the East Anglia rail franchise had originally been expected in June.

Current operator Abellio East Anglia, owned by Dutch rail firm NS, will run rail services until 2025 after the government picked its bid over those of rival shortlisted British transport operators FirstGroup and National Express.

The agreement includes a contract for Canadian train and plane maker Bombardier to build 660 new carriages at its Derby, central England factory, to expand capacity on the routes.

Transport Minister Chris Grayling said the contract award would ensure work for Britain’s rail industry.

“This is part of our plan to make an economy that works for everyone — not just the privileged few — by ensuring prosperity is spread throughout the country,” he said.

Train services in some parts of Britain, which privatised its rail services in the 1990s, are being hit by a five-day strike this week.

Southern, which runs trains from destinations such as Brighton and Gatwick Airport and is operated by Govia Thameslink Railway, part-owned by Go Ahead, has said only 60 percent of its services would operate during the week-long stoppage. ($1 = 0.7660 pounds) (Reporting by Sarah Young; Editing by Keith Weir)

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