Commuters in south Essex are waiting to see the effects of a takeover of Prism Rail, which runs the London-Fenchurch Street line.

New owner National Express - which has paid £166 million for the company - has pledged to invest more cash into services "to continue to improve the quality of service to passengers."

Prism currently owns several rail franchises, including c2c - formerly LTS Rail - West Anglia, Great Northern and Wales & West. National Express owns five, including Central Trains, Gatwick Express and ScotRail.

Phil White, chief executive of National Express, said: ''The combination of National Express and Prism Rail represents an excellent opportunity as we are enhancing National Express's position in the rail sector of the UK's public transport market.

''The acquisition of two busy London commuter businesses with strong growth prospects, and the longer tenure of c2c will strengthen our operations.''

Prism announced earlier in the year it was in takeover talks with an unnamed suitor. But in April the company said these had been called off pending the conclusion of franchise negotiations with the shadow Strategic Rail Authority, the public body responsible for rail franchises.

Last month the company agreed to a reorganisation of its portfolio of franchises. Prism agreed to surrender its loss-making Wales & West and Cardiff franchises at the end of March 2001.

Giles Fearnley, chief executive of Prism Rail, said: ''This offer recognises the strengths of the group that we have built up since privatisation. Following our recent agreement with the authority, this offer will give access to greater investment to continue to improve the quality of services offered to passengers.''

Prism said the £166 million deal, which equates to 615p a share for the company, would give the combined group sufficient financial resources to participate successfully in the current refranchising of the passenger rail sector.

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