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A second consortium has dropped out of the race to run trains in Wales after October.

There had originally been four transport giants in the running to take over the Wales and Borders network - which has been run by Arriva Trains Wales since 2003.

But Arriva withdrew last October for commercial reasons.

Now Abellio Rail Cymru (ARC) have notified Transport for Wales(TfW) that they have withdrawn from the procurement process. This follows the collapse of Carillion, which had been part of the bid consortium.

The two remaining companies are KeolisAmey and MTR Corporation (Cymru) Ltd.

Economy and Transport Secretary Ken Skates said: "Despite the best efforts of the team of experts, lawyers and counsel at Transport for Wales, and the ARC team, ARC has taken the regrettable decision to withdraw its bid having been unable to overcome the impact of Carillion’s liquidation.

(Image: Arwyn Roberts)

"It is unfortunate that, having invested significant time, effort and money into the process that they should be a further victim of the liquidation of Carillion."

When Carillion entered liquidation, Transport for Wales asked ARC to provide a proposal which demonstrated that ARC could still deliver the Final Tender without changing essential elements of it.

There was a chance they could have purchased Carillion Rail to secure the relevant capability for the service.

But a consortium member for another bidder yesterday successfully purchased the majority of Carillion Rail from the liquidator, leading to ARC withdrawing from the bidding process.

Mr Skates added: "Transport for Wales has analysed the robustness and technical capability of the remaining bidders and are confident that they are both capable of providing a high quality solution that will enable us to transform rail services right across Wales.

"The procurement evaluation will continue and ARC’s withdrawal does not expose the Welsh Government to any financial risk or delay to the process.

"We have two strong bidders remaining in the process and remain on target to award this exciting contract in May 2018 and to transform rail services in Wales and borders from October 2018."

The remaining bidders.

KeolisAmey

KeolisAmey is a joint venture formed between Keolis and Amey which currently runs the Docklands Light Railway in London.

MTR Corporation (Cymru) Ltd

The MTR Corporation runs Hong Kong's Mass Transit Railway and also invests in railways in different parts in the world.

It has obtained contracts to operate rapid transit systems in London, Biejing, Melbourne and Stockholm.