GOVIA, the surprise winner of the bid to run the county’s railways from April, has denied that it won by offering the cheapest deal for the Government.

Rivals have claimed privately that the successful bid was not necessarily the one which promised the biggest improvement for passengers.

A source close to one of the three losers said: "It’s a shame that Govia was chosen. Our bid had a lot of interesting ideas in it.

"There is a very clear message from the most recent franchise bids that the Government is going for the bid that requires the least amount of subsidy."

While the Department for Transport will not release details of other bids for the Integrated Kent Franchise, it is understood that at least three were close financially.

But a Govia source claimed that officials had also said its bid offered the best operational plans.

The Govia deal involves a total Government subsidy of £585 million over eight years. In year one, the subsidy will be £136.5million, falling to £17.5million in year seven.

But the cash is not all one way. At the end of the eighth year, Govia has pledged to hand over £9.4million to the Government.

Keith Ludeman, Govia’s chief executive, admitted that it offered a competitive subsidy line, but it would not be at the expense of benefits to passengers. He denied the franchise was a poisoned chalice, as it proved for Connex, the ousted former operator.

"It’s a great opportunity," he said. "Kent is due to grow significantly over the next 10 years and we want to be part of that."

Govia, a joint venture between Go-Ahead and Keolis, a subsidiary of SNCF French Railways, expects to double revenue to around £800million a year from 2009.

Fares are set to rise steeply over the next few years, especially when Hitachi high-speed trains are introduced that year. Passengers will have to pay a 30 per cent premium for shorter journey times.

Fares on existing trains are set to rise three percentage points above the rate of inflation from 2007. Growth in the Kent/Medway economy is also likely to increase business.

Govia also hopes that operational improvements and an £89million investment in rolling stock improvements, stations, ticket machines, car parks, and internet access on trains will encourage more people to use them.

Through service improvements and cost control, Govia expects to achieve a five per cent return on revenue. Mr Ludeman said Govia would put reliability, punctuality, safety and security at the heart of its operation.

He added: "I firmly believe that we are entering an exciting new era of rail travel in Kent. I’m totally committed to making this railway one that everyone in Kent can be proud of."

A team is working behind the scenes in preparation for the takeover from the heavily subsidised South Eastern Trains. The new franchise runs until March 31, 2012 - the year of the Olympic Games in London - but there is an automatic two year extension if performance targets are met.