Perth-based transport giant Stagecoach has commenced legal action against the Department for Transport over its disqualification from a rail franchise competition.
The firm announced it had issued a claim at the High Court in London stating the Government department breached its statutory duties in connection with the procurement of the East Midlands franchise.
Last month Stagecoach was disqualified from three rail franchise competitions – East Midlands, South Eastern and West Coast – over a row about pension payments.
The Perth firm said rail franchisees were being asked to accept more risk to plug a pensions gap which could have left it with liabilities of up to £1.6 billion.
The Department for Transport (DfT) said Stagecoach had not met the bidding criteria and subsequently announced its intention to award the East Midlands franchise to Abellio.
Stagecoach have demanded a judicial review of the decision and said it was also considering action over the ongoing competitions for the West Coast and new South Eastern franchises.
Stagecoach Group chief executive Martin Griffiths demanded “proper public scrutiny” of the bidding process.
“We remain deeply concerned at the Department for Transport’s procurement of the three most recent rail franchise competitions and the rationale behind its decisions,” he said.
“Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered.
“In view of the legal action we have taken today we believe it would be untenable for the DfT to proceed to sign any contract for the East Midlands franchise without a full and proper review of the procurement of that franchise to help restore public confidence in the process.”
A DfT spokesperson responded: “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.”