THE Strategic Rail Authority (SRA) will hand over £637m in subsidies over the next eight years to the operators of the new Transpennine Express franchise.

The figure was revealed on the day the authority signed an agreement with FGK, a consortium of First Group and Keolis, to take over the franchise from early next year.

But it was criticised by the Rail Maritime and Transport workers' union, which has previously accused the SRA of bankrolling current franchise-holder Arriva Trains Northern.

RMT regional organiser Stan Herschel said the level of subsidy was outrageous. He said: "If you look at routes where there is massive subsidy, the train companies do not care about running them.

"They are giving it back to the shareholders as profit."

A First Group spokesman said: "Regional services do not have the income through the farebox to cover the huge costs they incur.

"The subsidy that you get is also part of what dictates the level of investment in things like new trains, which we have already announced."

Fran Critchley, deputy secretary of the North-East Rail Passengers' Committee said: "Some services do need to be subsidised and it may be that this consortium may be able to grow the business so to reduce it.

"But, as far as we are concerned, it does not really matter to us where the money comes from, as long as the passenger gets a good service."

The consortium plans to spend about £250m on 56 100mph Desiro trains, which should cut journey times by up to ten minutes.

The trains will be maintained at depots in York and Manchester. Upgrades are planned for 30 stations on the route with improved security, toilets, ticketing and waiting facilities.

Two hundred jobs will be created in the North as a result.

SRA chairman Richard Bowker said: The signing of the franchise today, along with the contract to deliver new trains, is great news for passengers.

"The franchise will help to deliver better trains with better performance, improved services and more capacity - the things that matter to passengers."

The transpennine route serves a number of towns and cities in the North, including Darlington, Northallerton, York, Middlesbrough, and Newcastle.