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Stagecoach loses rail franchise legal battle


26 June 2020

The High Court has rejected a legal challenge brought by Stagecoach and Virgin against their disqualification from rail franchise bidding last year. 

The Government disqualified the two companies as well as Arriva from bidding for the West Coast, East Midlands and South Eastern franchise competitions because the companies refused to accept the allocation of risk for pension liabilities. 

Stagecoach had been bidding for East Midlands and South Eastern and was bidding in partnership with Virgin for West Coast.

West Coast was subsequently awarded to First/TrenItalia; East Midlands to Abellio; and the South Eastern competition was cancelled. 

Another disqualified bidder, Arriva, was initially a party to the judicial review but withdrew just before the case began after reaching a confidential settlement with the Government. 

Mr Justice Stuart-Smith’s ruling, which runs to 193 pages,  concludes that it was lawful to disqualify the companies on the issue of pensions. 

Responding to the ruling, Stagecoach said: “Our view remains that we were right not to accept the risks in these contracts. Nevertheless, we accept the decision and move on. The country is facing a huge challenge in fighting the Covid-19 pandemic, and all of our energies are focused on ensuring our transport networks help the national effort at this critical time.”

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