PASSENGER groups were facing fresh frustration last night with the race for the region's second biggest rail franchise likely to be delayed again.

The Strategic Rail Authority was thought to be ready to announce its preferred choice for the Trans-Pennine Express contract in the next few weeks.

But it now seems likely that the authority will simply perm two from three of the companies on its shortlist for the franchise.

The evaluation process will continue with the timetable for the start of the new franchise being set back six months.

All three bidders - Arriva, Connex and a consortium of First Group and French transport operator Keolis - have already revised their final proposals for the route which links Liverpool, Manchester, Leeds, York and Newcastle.

The SRA has seen the costs of a number of rail franchises spiral and has been forced to re-evaluate.

It is thought to be keen to agree a more realistic financial package with the eventual winner.

Arriva Trains Northern, which operates services on the route, sees its existing franchise split into two separate businesses from February.

Aside from Trans-Pennine, a new Northern rail franchise combining local rail routes from both sides of the Pennines is also being created.

Last night Peter Johnston, secretary of the Trans- Pennine Local Authority Rail Group, said: "Even if we had a preferred bidder and they began preparing right now it would be impossible for everything to be in place by February. It just seems the scenario is changing all the time, almost as an excuse not to make a decision."

Brian Milnes, chairman of the Tees Valley branch of Transport 2000, said: "They seem to be dragging the process out unnecessarily.

"One of the bidders, Arriva, is in obvious trouble and have yet to resolve their industrial dispute with conductors.

"But that said, I am not really happy with any of the three bidders."

* Plans to upgrade the East Coast Main Line could benefit from a private investment partnership agreed by the SRA. Project Golden Arrow aims to raise up to £10bn with the backing of American investors Morgan Stanley and Babcock & Brown.