A TRAIN company blighted by poor performance and strikes could still run services in East Lancashire, despite losing a key rail franchise today.

Arriva Trains Northern has not made the final two in the companies bidding for the TransPennine Express Franchise, which it currently runs. Connex Transport UK Ltd or First Group/Keolis will run the routes from late 2003.

But Arriva's current TransPennine Express service, from Scarborough to Leeds and on to East Lancs through Burnley, Accrington and Blackburn, has been altered.

The East Lancs section is expected to be withdrawn from the franchise and transferred to another new project, the Northern Franchise, due in the summer of 2004.

Arriva could still bid for the Northern Franchise and continue to control the current TransPennine line in East Lancs.

Negotiations are underway with the government's Strategic Rail Authority for Arriva to run the East Lancs route in that interim period from late 2003 to the summer of 2004.

A spokesman said: "Arriva is disappointed that it has been unsuccessful in its bid for the TransPennine Express franchise."

Arriva was fined £2 million in March after failing to meet driver recruitment targets in the previous year ,which led to the sporadic cancellation of services. Its conductors have staged two-day strikes every month this year in a dispute over pay.