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Virgin’s partner Stagecoach launches legal action against the government

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Stagecoach has launched legal action against the Department for Transport (DfT) after they were disqualified from the East Midlands franchise.

The train and bus operator were verbally informed by the DfT last month, that they were disqualified from the UK franchise competitions over, South Eastern, West Coast and East Midlands.

Stagecoach refused to accept pension risks that could have been “well in excess of £1bn” from the three franchise bids they were disqualified from.

The company issued a claim in the High Court as they allege the DfT “breached its statutory duties.”

Martin Griffiths, chief executive of Stagecoach 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.”




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