Stagecoach confirms it will take legal action over franchise ban

Perth-based transport firm Stagecoach has confirmed it will take the Department for Transport (DFT) to court early next year.

The UK Government banned the firm from bidding on three rail contracts – East Midlands, West Coast and South Eastern – 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 have 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 its 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 1% like-for-like boost in revenues.

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.

Bosses said they want to expand the division and are looking at new partnerships with airports, festivals and events across the UK.

A DFT spokesman said: “Stagecoach is an experienced bidder who knowingly submitted non-compliant bids. We do not comment on legal proceedings.”