Stagecoach launches Department for Transport legal challenge over rail bid ban

Stagecoach has warned the Department for Transport that its credibility is on the line unless it publishes its reasons for replacing the train company on the East Midlands Trains franchises and barring it from bidding for HS2 and South Eastern rail services.

Stepping up the pressure on Chris Grayling, the transport secretary, over his unprecedented decision to bar Stagecoach from the railways, the passenger transport group has said that it will challenge the government.

“We can confirm we have written to the department seeking answers to the numerous legitimate questions many people have about their decision,” a spokesman said. “We expect a prompt, full and transparent response to help restore public confidence in the integrity of the government’s procurement process, which has been badly shaken by this and other recent events.”

Last week Mr Grayling banned Stagecoach from bidding for train franchises after it refused to take on the full historic pension liabilities of railway workers. The decision effectively also ends the Virgin Trains franchise that has operated the west coast main line between London, Manchester and Scotland since privatisation, as it is jointly operated by Stagecoach.

Stagecoach is valued on the stock market at £700 million and is one of the five big passenger transport companies that emerged out of privatisation, including Arriva, First Group, National Express and Go-Ahead. It employs 31,000 people running buses and trains in Britain and America.