STAGECOACH has been disqualified from three rail franchise competitions – meaning Virgin Trains, a joint venture between Virgin Group and the Scottish transport giant, will lose the West Coast Main Line services it has run since 1997.
Stagecoach said it was told it has been banned from the East Midlands, South Eastern and West Coast Partnership franchise competitions after submitting non-compliant bids “principally in respect of pensions risk”. The Department for Transport’s (DfT) decision to award the East Midlands Railway contract to much-criticised ScotRail operator Abellio means three out of five train journeys in Britain will soon be on services run by foreign companies or governments.
Bidders for the franchises were asked to bear the full long-term funding risk on relevant sections of the Railways Pension Scheme, Stagecoach said. Martin Griffiths, the chief executive of the Perth-based firm, said: “We are extremely concerned at both the DfT’s decision and its timing.
“The department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.
“We have drawn on more than two decades of rail experience and worked in partnership with local stakeholders to develop high quality proposals to improve each of these rail networks.”
Stagecoach shares were down nearly 2% in morning trade at 130.9p. The DfT claimed Stagecoach “breached established rules” and insisted the company is “responsible for its own disqualification”.
It added: “We have total confidence in our process. We have awarded the East Midlands franchise to Abellio after they presented a strong, compliant bid.”
The West Coast Partnership franchise is due to be awarded in June.
The winning bidder will be responsible for designing and running the initial HS2 high-speed services from 2026 as well as the West Coast Main Line service.
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