Stagecoach has initiated legal action against the UK’s Department for Transport (DfT) after it was disqualified from bidding for the East Midlands rail franchise.

The transport group was barred from placing bids on three franchises for not meeting pension requirements.

Stagecoach placed joint bids for the South Eastern and West Coast franchises and an independent bid for East Midlands, which it operated since 2007.

Last month, DfT awarded the East Midlands franchise to Abellio.

In its lawsuit filed at the High Court in London, Stagecoach claimed that the DfT has violated its statutory duties with regard to the East Midlands franchise.

“Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered.”

The company added that it is also planning to launch a judicial review over the East Midlands contract, as well as taking legal action over its disqualification from the other two franchises.

Stagecoach chief executive Martin Griffiths 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.

Do you see impact on recruitment in your company due to COVID-19 pandemic?

View Results

Loading ... Loading ...

“Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered.”

During the bidding process, DfT asked the applicants to bear the full long-term funding risk on some parts of the Railways Pension Scheme. The Stagecoach bid for the East Midlands franchise was prohibited for non-compliance on this requirement.

It was disqualified from placing bids for the West Coast and South Eastern franchises on the same ground.

Last month, Stagecoach sought clarification from the DfT for its disqualification and expressed an intention to take legal steps if the response was not satisfactory.

A DfT spokesperson declined to comment on the ‘legal proceedings’, adding that the agency has total confidence in the franchise competition process, reported The Guardian.