Stagecoach fights back at Department for Transport after being shut out of rail bid

They say the DFT breached its statutory duties in the way it put the franchise out to competition.

They are also demanding a judicial review.

It is the second time within weeks that Stagecoach has lodged a claim against the Government, having been barred from bidding for the East Midlands rail franchise.

This came amid a row over staff pensions as it feared being exposed to “substantial” additional contributions.

Stagecoach said common to both claims “is our refusal to accept the pen- sion risks that the DfT requires”.

Chief executive, Martin Griffiths, said: “We believe the rail system should be about appointing the best operator for customers, not about passing unquantifiable, unmanageable and inappropriate risk to train companies. It is disappointing that we have had to resort to court action to find out the truth around the DfT’s decision-making process.”

Patrick McCall, senior partner at Virgin Group, which owns 51 per cent of Virgin Trains, the rest by Stagecoach said it was “extremely frustrating” its disqualification “has nothing to do with looking after passengers or running a good train service”.

He added: “The DfT has ignored our track record and instead focused on which business is reckless enough to take on various unquantifiable risks, such as pensions.”

Stagecoach has also been barred from the South Eastern franchise.

It says pension risks for the three combined could be well in excess of £1billion.

The DFT said: “Stagecoach… submitted non-compliant bids on all competitions.

In doing so, they disqualified themselves.

“We do not comment on legal proceedings. However, we have total confidence in our franchise competition process and will robustly defend decisions that were taken fairly following a thorough and impartial evaluation process.”

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