Branson sues over Grayling move to take him off rails
Stagecoach and SNCF join legal challenge over DFT decision to ban companies from bidding for franchise
SIR RICHARD BRANSON has launched legal action against Chris Grayling, the under-fire Transport Secretary, over his decision to effectively boot Virgin off the railways.
Virgin has filed a High Court claim in conjunction with partners Stagecoach and SNCF. They are challenging the Government’s procurement process for the West Coast rail franchise and calling for a judicial review.
Meanwhile, The Daily Telegraph has learned that Stagecoach will file, the week after next, a separate legal claim against its disqualification from bidding for the South Eastern franchise.
Mr Grayling’s department is in danger of bursting at the seams under the weight of legal action. As revealed by The Sunday Telegraph, Stagecoach and German state operator Arriva have filed claims against him over his decision to rule bids for the East Midlands franchise “non-compliant”.
The legal challenges come after the Department for Transport was forced to pay £33m to settle action brought by Eurotunnel following the award of a Brexit ferry contingency contract to a company that had no ferries. P&O has brought a similar case against the Government, again alleging a flawed procurement process.
A war of words erupted between Stagecoach and Mr Grayling, who said all three of its outstanding rail bids failed to meet bidding requirements and were therefore invalid.
The squabble centres around a demand for rail operators to make increased contributions to one of the country’s biggest final salary retirement funds, within which a £6bn black hole has opened up. Sir Richard said that shouldering additional pension commitments was not feasible. “We can’t accept a risk we can’t manage – this would have been reckless,” he said.
The billionaire admitted to being left “devastated” at the rail ejection and “baffled” as to why the DFT would not discuss the non-compliance of the bid. Virgin Trains has operated on Britain’s railways since 1997.
The West Coast line is currently jointly run by Virgin and Stagecoach. In order to retender for the line, upon which some High-speed 2 trains are scheduled to run, they brought in SNCF, the French state-owned rail firm.
Martin Griffiths, the Stagecoach chief executive, said: “It is disappointing that we have had to resort to court action to find out the truth around the Department for Transport’s decisionmaking process in each of these competitions.”
Patrick Mccall, Virgin senior partner, said: “It is extremely frustrating that the reason our bid was disqualified has nothing to do with looking after passengers or running a good train service.”
Guillaume Pepy, SNCF chairman said: “We are disappointed at how the DFT has handled the procurement process for the West Coast Partnership franchise. We strongly believe rail franchises should be let on a sustainable basis to those operators who offer the best services, the best trains, and the best customer experience in a costefficient manner.”
A Government spokesman said: “Stagecoach is an experienced bidder who knowingly submitted non-compliant bids on all competitions. In doing so, they disqualified themselves.
“We do not comment on legal proceedings. However, we have total confidence in our franchise competition process and will robustly defend decisions that were taken fairly following a thorough and impartial evaluation process.”