Stagecoach disqualified from three government bids

The Department for Transport named Abellio as the winner of the next East Midlands passenger rail franchise

The Department for Transport named Abellio as the winner of the next East Midlands passenger rail franchise

Transport Secretary Chris Grayling said: "Improving the experience for passengers is at the heart of this new franchise".

Stagecoach had also applied for the East Midlands and South Eastern franchises, both of which have been rejected.

Dominic Booth, managing director of Abellio UK, said: "Abellio is proud to have been selected as the Winning Bidder for the East Midlands franchise".

There are plans to oversee the introduction of more flexible and convenient smart ticketing options, free wifi and high quality mobile connectivity on board services, improved delay repay compensation for all passengers, a stations improvement fund of £16.8million, 916 extra vehicle park spaces and 1,050 cycle spaces - and a ticket buying facilities in place at all stations.

Martin Griffiths, the chief executive of Stagecoach, has called for an "urgent meeting" with the DfT "to discuss our significant concerns" and said the group was "extremely concerned with the decision and its timing".

Transport secretary Chris Grayling has announced that the franchise has been awarded to Abellio East Midlands, pending successful completion of a standstill period of at least ten days.

The East Midlands franchise, which operates eastbound services running between Leicester and Lincoln - stopping in Newark - will now be operated by Dutch-owned Abellio from August this year until 2027.

Unless a change takes place, the move will end the Virgin Trains' brand's operation on United Kingdom railways.

Stagecoach said it had been banned from competing because its preferred pensions scheme was rejected for a "higher-risk approach", but the DfT insisted it had "total confidence" in the bidding process.

The winning bidder will be responsible for services on both the West Coast Main Line from March 2020, and designing and running the initial HS2 high-speed services from 2026.

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He said they were considering an appeal but added: "I am devastated for the teams who have worked tirelessly to make Virgin Trains one of the best train companies in the United Kingdom, if not the world".

Griffiths said the issue was "more evidence that the current franchising model is not fit for purpose".

Without ongoing government support for the long-term funding of railway pensions, the Pensions Regulator had indicated that an additional £5bn to £6bn would be needed to plug the gap in train operator pensions.

It could also see Virgin Trains, a joint venture between VirginGroup and Stagecoach, lose the West Coast Main Line franchise it has run since 1997.

Virgin has operated the West Coast route - taking in cities including Coventry, Birmingham, Manchester, Liverpool, and Glasgow - for 22 years.

It also throws into doubt the future of the twice daily direct rail link from Shrewsbury, Wellington and Telford to London, launched in a blaze of publicity in 2014.

We're studying the DfT's decision carefully to understand why they've taken this action and would like to reassure all our customers that they can still book and travel as normal.

But, as the BBC reports, the DfT claims that Stagecoach - which owns 49% of Virgin Rail - "repeatedly ignored established rules", particularly with regard to pensions provisions for its employees.

Stagecoach's East Coast franchise was renationalised previous year following poor performance and mounting losses.

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