Britain's Go-Ahead Group loses West Midlands franchise after a decade

LONDON, Aug 10 (Reuters) - British transport group Go-Ahead on Thursday failed in its bid to retain its West Midlands rail franchise after running the network in central England for 10 years.

Govia, Go-Ahead's venture with Keolis, lost out on the contract to a Dutch-Japanese joint venture, the Department for Transport said, adding that nearly 1 billion pounds ($1.30 billion) would be invested in the network around Birmingham, Britain's second biggest city.

Go-Ahead, with also runs the Southern Railway network where services have been severely disrupted by industrial action, said that it was "disappointed" to lose the contract.

The franchise was awarded to West Midlands Trains, a joint venture between Abellio, East Japan Railway Company (Other OTC: EJPRF - news) and Mitsui & Co Ltd. Govia will continue to operate trains on the network until 2017. ($1 = 0.7697 pounds) (Reporting by Alistair Smout, Editing by Paul Sandle)