Stagecoach sues Department for Transport over West Coast rail franchise
Stagecoach said today it had launched a legal claim against the Department for Transport (DFT) in connection with the competition for the West Coast rail franchise.
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It said it had issued a High Court and judicial review claim alleging that the DfT breached its statutory duties in connection with the ongoing competition for the franchise.
The claim has been brought by West Coast Trains Partnership, in which Stagecoach has a 50 per cent share, with SNCF holding 30 per cent and Virgin 20 per cent.
On 8 May Stagecoach issued a claim against the DfT in connection with the competition for the East Midlands rail franchise, which was won by Abelio.
It follows a decision by the DfT in April to disqualify Stagecoach and its partners from the East Midlands, West Coast and South Eastern franchise competitions over its refusal to share pension liabilities with the government.
Stagecoach argues it is wrong for the government to ask it to share the pension risks attached to each of the franchises which it estimates could be well in excess of £1bn.
Stagecoach 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 in each of these competitions. However, we hope court scrutiny will shine a light on the franchising process and help restore both public and investor confidence in the country's rail system."
A DfT spokesperson said: “Stagecoach is an experienced bidder who knowingly 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.”
Stagecoach had operated the East Midlands franchise since 2007 and was bidding to renew a contract that expires this year.
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Stagecoach was involved in joint bids with Alstom for the South Eastern commuter network and Virgin and SNCF for the West Coast line running to Scotland.
It lost its contract to run trains from London to Edinburgh last year.