FirstGroup to replace Stagecoach on rail route

PERTH: Stagecoach to continue its legal action against Department for Transport

Perth-based Stagecoach will continue its legal action against the Department for Transport after the lucrative West Coast rail franchise was awarded to a Scottish transport rival yesterday.

From December the train services on the line will be run by First Trenitalia – a joint venture between Aberdeenbased First Group and Italian-owned Trenitalia.

Virgin Trains, a partnership between Stagecoach and Virgin, has run the franchise since March 1997.

The West Coast Partnership (WCP) contract also includes responsibility for running the first HS2 trains from 2026.

Stagecoach was barred from bidding for three franchises – including the west coast - by the Department for Transport (DfT) in April after a row over pensions liabilities.

The company subsequently lodged High Court actions claiming the DfT breached its statutory duties, which include a “fair” tendering process. It is also seeking a judicial review.

Yesterday a Stagecoach Group spokesman confirmed the company’s legal action would continue despite the franchise announcement.

The spokesman added: “The Stagecoach-Virgin partnership and our fantastic team at Virgin Trains have made a huge contribution over the past two decades to driving growth and innovation on Britain’s railway.

“We are incredibly proud of everything our people have achieved, and the positive and lasting legacy they leave for our customers,” he said.

Under the terms of the new agreement, First Trenitalia will operate 263 additional weekly services every week from December 2022.

FirstGroup chief executive Matthew Gregory said the contract offers a “more appropriate balance of risks and rewards for us as operators” compared with traditional franchises.

He said that, under the first phase of the deal from December this year to March 2026, the firm will earn returns on “significant investments in services and facilities” but this will be protected by a “much improved revenue risksharing mechanism”.

First Trenitalia’s premium payments to the government have been set at £1.6 billion during this period.

Top: Virgin Trains will vanish from the UK after the company was disqualified from the rail franchise bidding process. Above: FirstGroup chief executive Matthew Gregory.