Stagecoach disqualified from current competitions

STAGECOACH SAYS it has been disqualified from three ongoing franchise competitions for submitting non-compliant bids, principally in respect of pensions risk. It is understood other bidders have also been disqualified on the same basis, but as we went to press none had yet declared this to be the case.

The company was bidding for the East Midlands franchise, now awarded to Abellio, along with South Eastern (in partnership with Alstom) and West Coast Partnership (in a joint bid with Virgin and SNCF). In a statement, Stagecoach says a senior Department for Transport official ‘has verbally informed Stagecoach that it has been excluded from all three competitions for submitting non-compliant bids principally in respect of pensions risk’. It adds that bidders for these franchises were asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme, at a time when the Pensions Regulator is seeking additional funding because of serious doubts over the Government’s ongoing support for the industry-wide scheme.

The company’s Chief Executive Martin Griffiths said Stagecoach is ‘extremely concerned at both the DfT’s decision and its timing’, adding ‘The Department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns’.

The remaining bidders for the South Eastern franchise are incumbent operator Govia and a venture led by Abellio, while for West Coast Partnership, due to be awarded in June, the other bidders are a partnership between FirstGroup and Trenitalia and a venture led by MTR in partnership with Guangshen Railway.