Stagecoach excluded from rail franchise bids

Marco Green
April 14, 2019

Chris Grayling added: "Improving the experience for passengers is at the heart of this new franchise".

The DfT banned Stagecoach from the East Midlands, South Eastern and West Coast Partnership franchise competitions "principally in respect of pensions risk", the company said.

"I think Stagecoach has run a reasonably good service so it's worrying that it was disqualified and we ended up with Abellio, which has been very badly criticised for the way it's run other franchises, as the only bidder".

The company said it had improved services for passengers from introducing tilting Pendolino trains, to a pioneering automated delay repay scheme, introducing onboard entertainment streaming services, and becoming the first franchised rail operator to offer m-Tickets for all ticket types.

"Passengers will benefit from the provision of free wifi throughout the franchise, both on-trains and at stations, and a significant uplift to the current ticketing system, with the introduction of smart, flexible ticketing options, including to provide better value for those who travel regularly but less than five days a week, as well as improved ticket-buying facilities and nine newly staffed stations".

Stagecoach chief executive Martin Griffiths said: 'We are extremely concerned at both the DfT's decision and its timing.

Today, Abellio has been announced as the successful bidder to run the East Midlands Railway franchise for 8 years, from 18th August 2019 until 22nd August 2027.

Trains will no longer run to Liverpool - a separate service will run from Nottingham to Merseyside.

When asked about the effect this will have on the RPS, a TRP spokesperson said: "We are working closely with the scheme trustees, Rail Delivery Group and the DfT to ensure the best possible outcome for pension scheme members".

Virgin supremo Sir Richard Branson has warned that Virgin Trains could disappear along with thousands of jobs following the shock announcement that it has been blocked from bidding to carry on running services on the West Coast Main Line.

Virgin trains will cease running its West Coast service between London and the north, in March 2020.

The Pensions Regulator has estimated the United Kingdom rail industry needs an additional £5-6bn to plug the pensions shortfall, and the company said it was being asked to take on risks it "cannot control and manage".

The Virgin Trains owner added how the company had "significant concerns over the latest developments and their implications for the future of the United Kingdom rail market" and that options would need to be considered before any further decisions were made.

Stagecoach, which was shortlisted for East Midlands Rail, South Eastern Rail and the West Coach Partnership, said that its bid was "consistent" with industry guidance, however the DfT said the group had made "significant changes" to the commercial terms of the bidding.

He added: "This is more evidence that the current franchising model is not fit for goal".

In 2017, Stagecoach lost the franchise to run South West Trains, which operates to and from London Waterloo, to consortium of FirstGroup and Hong Kong's MTR.

But, as the BBC reports, the DfT claims that Stagecoach - which owns 49% of Virgin Rail - "repeatedly ignored established rules", particularly with regard to pensions provisions for its employees.

Other reports by Click Lancashire

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