Stagecoach has launched action against the Department for Transport (DfT), claiming it breached its statutory duties in connection with the West Coast Partnership railways franchise when disqualifying the firm over pension funding issues.
Along with its partners Virgin and SNCF, West Coast Trains Partnership - in which Stagecoach has a 50% share - issued a claim at the High Court, along with a judicial review claim.
The claims against the DfT are in connection with the procurement of the new East Midlands rail franchise. They come as Stagecoach and its partners were disqualified from the East Midlands, West Coast Partnership, and South Eastern franchise competitions for "non-compliant bids principally in respect of pensions risk".
Stagecoach stated it refuses to accept the risks the DfT requires operators to bear in relation to the new franchises. All successful franchise operators will be expected to contribute into the Railways Pension Scheme, which The Pensions Regulator has estimated needs £5bn to £6bn to plug the deficit.
In a stock exchange announcement today (24 May), Stagecoach chief executive Martin Griffiths commented: "We believe our 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."
SNCF executive board chairman Guillaume Pepy said: "We are disappointed at how the DfT has handled the procurement process for the West Coast Partnership franchise. We strongly believe rail franchises should be let on a sustainable basis to those operators who offer the best services, the best trains, and the best customer experience in a cost-efficient manner."
Virgin Group senior partner Patrick McCall said it was "extremely frustrating that the reason our bid was disqualified has nothing to do with looking after passengers or running a good train service".
He continued: "The DfT has ignored this track record and instead focused on which bidder is reckless enough to take on various unquantifiable risks, such as pensions."
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