LONDON (Bloomberg) - National Express Group plc., Govia Ltd., NedRailways Ltd. and Stagecoach Group plc. are the final bidders for the new South Central rail franchise, the UK Department for Transport said.

The franchise, which covers the southern and southeastern rail network, will be formed from the existing South and Gatwick Express franchises, the department said in a statement yesterday. The winning rail company will operate the Gatwick Express between London Victoria Station and Gatwick airport, as well as train connections to Brighton on the south coast of England.

Rail operators are benefiting as motorists facing soaring prices at the pump turn to public transport. National Express reported on July 31 that first-half earnings rose 14 percent as more Britons parked their cars and took trains and buses.

"It's one of the largest commuter franchises in the UK and it's financially very significant," Gert Zonneveld, a London-based analyst at Panmure Gordon, said yesterday in a phone interview. He has a "hold" recommendation on Stagecoach shares and a "buy" on National Express.

The South Central franchise, to start on September 20, 2009, will run for almost six years. The successful bidder is scheduled to be announced next summer, the department said.

The winner must also help "facilitate" the East London Line Extension starting in 2010 and the expansion and upgrading of Thameslink, a major commuter line that runs north and south through central London, the agency said.

"We want passengers across the franchise area to see improvements: longer trains, safer stations and later running services," Rail Minister Tom Harris said in the statement.

Stagecoach fell 4 pence, or 1.4 percent, to 280 pence in London trading, while National Express dropped 14 pence, or 1.4 percent, to 964 pence.