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Stagecoach launches second legal claim against DfT


UK bus and rail operator Stagecoach, which in April was disqualified from three rail franchise contests, has launched a second legal action against the Department for Transport.

Alongside French national operator SNCF and Virgin Trains, its partners in the West Coast mainline bid, Stagecoach alleges the DfT breached its statutory duties when it kicked it out of the tendering process.

Martin Griffiths, Stagecoach’s chief executive, said in a statement on Friday: “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.”

Guillaume Pepy, SNCF’s executive board chairman, added that he was “disappointed” with the procurement process and believed franchises should be awarded on a “sustainable” and “cost-efficient” basis.

Patrick McCall, senior partner at the Virgin Group, said the DfT had “ignored” the company’s track record as the incumbent “and instead focused on which bidder is reckless enough to take on various unquantifiable risks, such as pensions”.

In mid-April, Stagecoach said it had been disqualified from the three franchise competitions because of “non-compliant” bids, “principally in respect of pensions risk”. Stagecoach has suggested that the funding gap was almost £700m on the West Coast franchise alone.

Stagecoach is the incumbent on two of the franchises it was disqualified from — the Midland Main Line and the expanded West Coast service, which is due to include high-speed rail services on a new line from 2026 as part of the £56bn HS2 project. Stagecoach was also ruled out of a third franchise, South Eastern.

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 is already suing the DfT over the East Midlands tendering contest.



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