Arriva has been running part of the new franchise area

The firm is not on a shortlist for the new Northern Rail franchise, announced by the Strategic Rail Authority (SRA) on Thursday.

As Arriva Trains Northern, the company had been running part of the area.

But for the shortlist, the SRA chose Serc/Ned Railways and FirstGroup, which has been running First North Western services, which will now be incorporated into the new franchise.

The new contract could be as long as eight years, with the last two years dependent on achieving performance targets. It will begin in autumn 2004.

The franchise will include rural and urban services throughout the whole of the North of England, including in and around the Greater Manchester, South Yorkshire, West Yorkshire and Tyne & Wear Passenger Transport Executive (PTE) areas.

It will also be responsible for a number of services running from, and into, the Merseyside PTE area.

The SRA's operations managing director Nicola Shaw said: "The Northern Rail franchise will be one of the first of a new generation of customer-focused operations, designed to deliver for passengers.

"We have selected two strong contenders and the competition will continue to be robust."