TROUBLED rail operator Arriva is to continue to run the region's local and trans-pennine services for at least another year.

The strike-hit company has agreed an interim franchise arrangement with the Strategic Rail Authority (SRA) until September 2004. It will then lose the Trans-pennine Express franchise. Favourites to take it over are Connex and First Group.

However, Arriva is still very much in the running for the Northern franchise in the summer.

Arriva is involved in one of the longest-running industrial disputes in recent trade union history and conductors have staged 23 one-day strikes.

The Rail, Maritime and Transport (RMT) union is balloting its members on a new pay offer, but predict it will be rejected.

Yesterday, a spokesman for the watchdog Rail Passengers' Committee said there had been an "inevitability" about the interim franchise move.

"When they took over the franchise in 2000 it had only a year to run and would have expired in February 2001.

"But because of other issues, bids hadn't even been invited by them and they did a two-year deal to now."

He said that from the passengers' point of view the biggest problem with Arriva was the industrial dispute.

Dirty trains, lack of information about services, punctuality and reliability have all been charges levelled against the company in the past.

The watchdog spokesman said yesterday: "Notwithstanding the strike, the indications are that Arriva was beginning to do a lot better and had turned the corner. It has really made an effort to improve things and is starting to succeed."

Arriva's chief executive Bob Davies said: "We are pleased to have reached agreement with the SRA."

He said that when they took over in 2000 they were confronted by under-investment and under-staffing.

"Since that time, we have addressed these problems and made considerable progress in improving overall performance," he said.