TRANSPORT chiefs this week insisted plans to re-establish passenger rail services in the Borders remained on track - despite a member of one of the groups bidding for the contact to build the line announcing their intention to withdraw.

It follows the revelation that American firm Fluor was no longer seeking to be part of the £295 million project to rebuild the line between Edinburgh and Tweedbank.

Transport Scotland, the national agency in charge of overseeing the rebuilding of a 35-mile section of the former line between Edinburgh and the Borders, said the company was part of one of three bidders for the £230m construction scheme. The others were BAM and IMCD.

However, it claimed it was not unusual for a consortium member to pull out and works were still expected to start in 2011.

A Transport Scotland spokeswoman said: "The competition for Borders railway remains on track and we expect to begin construction in 2011 and have an operational railway up and running for communities in Midlothian and the Scottish Borders in 2014.

"We are aware that the New Borders Railway consortium - one of the three consortia chosen from an original shortlist of five - is currently considering the replacement of one of its grouping and we expect to hear from it shortly." But she added: "It should be noted that change to the commercial priorities of individual bidders during procurement is not uncommon, particularly on large scale projects where the timescales for tendering and construction are lengthy." Local Lib Dem MSP Jeremy Purvis said the situation was "concerning" and urged the Scottish government to move quickly to secure a contractor for the line.

"Under the current schedule there is still a very long wait of a full year before there is a final contractor in place and that does leave the door open to further concern," he said.

"The Scottish government wants to have the main contractor in place for the new Forth crossing before the Holyrood elections in May and I want them to do the same for the Borders railway.

"The railway is critical to the future needs of the Borders economy and this is the best time to be building infrastructure." Meanwhile, plans have been unveiled to realign the railway and build two new roundabouts on the A7 to bypass the hamlet of Falahill, north of Heriot. And the Border Telegraph understands the move, which negates the need to move a high powered gas main, could save the developers as much as £5million.

Transport Scotland lodged the plans with Scottish Borders Council on Thursday.

Project Director Steve Milligan said: "It's part of our approach to remove the risk from the project so bidders can come in and just build." It is claimed the proposals, which include two new overtaking lanes on the A7, would improve road safety and have the support of the majority of residents in Falahill.

However, opponents have warned it will add to the misery of motorists who regularly commute by car between Edinburgh and the Borders.

Local Councillor Sandy Aitchison, of the Borders Party, who regularly travels the route, said: "I am completely against this proposal. This whole idea flies in the face of transport policy. It will slow down traffic and also make the what is already a problem road even more dangerous."