Stagecoach confirms legal action over rail contracts row

Richard Branson and Virgin partner with Stagecoach in the West Coast main line franchise
Richard Branson and Virgin partner with Stagecoach in the West Coast main line franchise
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Bus and train operator Stagecoach has confirmed it will take the Department for Transport to court early next year over the Government’s decision to ban the firm from bidding for three rail contracts.

Bosses were blocked from bidding for the West Coast franchise - which runs through Lancashire - and two others over pension deficit concerns.

The cases will be heard in the High Court in the new year with the Government unlikely to be willing to settle in case it encourages others to make similar claims.

Stagecoach said: “We continue to pursue our claims against the Secretary of State for Transport regarding his decisions to disqualify us from three rail franchise competitions.

“The three cases are due to be heard in the High Court in early 2020.”

Despite already losing the East Midlands franchise to Abellio, bosses said they had been working closely with the new operators to ensure a smooth handover.

The company added: “We and our joint venture partner, Virgin (Trains), will approach the forthcoming transition of the West Coast franchise in the same spirit of collaboration.”

It was announced in August that FirstGroup would take on the route.

On Stagecoach’s bus business, which operates in towns and cities across the country, there was better news, particularly at its London division.

The company said it received higher than expected payments for providing “favourable” service and was confident of winning more contracts in the capital.

Its regional operations saw a one per cent like-for-like boost in revenues.

The company said this was lower than expected due to tough comparisons last year with the summer heatwave and the end of rail replacement services in the Derby area.