Another bidder has withdrawn from the running to operate the Wales and Borders rail franchise, blaming the collapse of construction giant Carillion.
Abellio Rail Cymru (ARC) said it was unable to overcome the impact of the liquidation last month of Carillion, which was its partner in the bid.
The firm was one of four original bidders for the contract. Arriva Trains Wales, which currently runs the service, pulled out of the running in October.
The move leaves two remaining bidders – French joint venture KeolisAmey and Hong Kong-based MTR Corporation.
Ken Skates, the Welsh Government’s Cabinet Secretary for Economy and Transport, said it was unfortunate that having invested significant time, effort and money into the process, ARC is a further victim of Carillion’s liquidation.
Amey Rail has bought most of Carillion’s rail projects, safeguarding 700 jobs, but Mr Skates said: “Whilst this has safeguarded a number of jobs in Carillion Rail, it has unfortunately left ARC unable to secure the capability it would need to proceed.
“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.
“I would like to further recognise ARC’s contribution to this process. The team’s enthusiastic and professional involvement to date has contributed significantly to the procurement process.”
The contract is due to be awarded in May and the Wales and Borders services, and the South Wales Metro, will begin operating from October.