Stagecoach starts legal action after losing East Midlands rail franchise
East Midlands Trains (EMT) has started legal action against the Department for Transport (DfT) after losing the East Midlands rail franchise
The news comes after Dutch firm Abellio was announced as the successful bidder to operate the East Midlands Railway franchise last month.
The firm will take over the franchise from EMT’s parent company Stagecoach from August 2019 until 2027.
A claim issued at the High Court in London alleges that the Department for Transport breached its statutory duties in connection with the procurement of the new East Midlands rail franchise.
A statement from Stagecoach said: “We have informed the DfT that we are also preparing a claim for judicial review of its decisions to disqualify us from bidding for the East Midlands rail franchise and to award the franchise to Abellio. Additionally, we are considering legal action against the Department in respect of the ongoing competitions for the West Coast Partnership franchise and a new South Eastern franchise.”
“[We refuse] to accept the potential pension risks that the DfT requires operators to bear in relation to the three new franchises. The full extent of these risks is unknown but we estimate them to be well in excess of £1bn.”
Martin Griffiths, Stagecoach Group chief executive, said: “We remain deeply concerned at the Department for Transport’s procurement of the three most recent rail franchise competitions and the rationale behind its decisions.
“Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered. As a result, regrettably we have had no option but to commence legal action against the DfT to ensure the serious issues involved and the DfT’s opaque decision-making are subject to proper public scrutiny.
“In view of the legal action we have taken today we believe it would be untenable for the DfT to proceed to sign any contract for the East Midlands franchise without a full and proper review of the procurement of that franchise to help restore public confidence in the process.”
