Business

Stagecoach calls for inquiry after rail bid document leak

A Virgin TrainImage copyright Getty Images

Stagecoach has called for an inquiry into the way rail franchises are awarded, after details of a bid it submitted were sent to a rival.

The transport giant claims the Department for Transport (DfT) failed to properly investigate the matter.

The DfT said rival Abellio had not accessed information that would have affected the Stagecoach bid.

Last week, Stagecoach was stripped of the East Midlands rail contract and barred from applying for two more.

‘Materially flawed’

Stagecoach said in a statement that there had been a “serious breach of the integrity of the procurement process”.

A Stagecoach Group spokesman said: “We do not consider the matter closed. There is growing evidence that the procurement process followed by the DfT in this case has been materially flawed and should be subject to an independent investigation.

“We believe there are also wider questions to be answered across other franchise competitions.”

Sensitive Stagecoach documents for the East Midlands franchise were inadvertently emailed by a transport official to Stagecoach’s rival, Abellio, which ended up winning the contract.

The government said Abellio had not looked at the documents.

“An expert third-party investigation established conclusively that Abellio did not access any information relating to any other bidders that affected their bid. There was no effect whatsoever on the outcome of the bid process.

“Stagecoach disqualified themselves from the process by lodging non-compliant bids,” the DfT said.

When approached by the BBC, Abellio refused to comment on the matter.

Stagecoach was disqualified from three competitions to run rail services by the DfT, which earlier this month said the firm had not met pensions rules.

At the time, Stagecoach said bidders for the franchises had been asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme.

Image copyright Virgin Trains

The Pensions Regulator has estimated the UK rail industry needs an additional £5bn to £6bn to plug the pensions shortfall.

‘Reckless’ approach

It emerged on Friday that Stagecoach sent a letter to MP Frank Field, chair of the Work and Pensions Committee, on Wednesday.

In the letter, Stagecoach said the DfT had “sought to rip up the long-standing position that the government is the ultimate guarantor of the Railways Pension Scheme” and that its approach was “reckless”.

The firm urged the committee to “request a full independent value-for-money review” of the DfT’s position.

Stagecoach had been bidding to renew the West Coast franchise in partnership with Virgin Trains and France’s SNCF when it was disqualified.

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

After the disqualifications, Virgin boss Sir Richard Branson said his train business, which is 49% owned by Stagecoach, could disappear from the UK.

https://www.bbc.co.uk/news/business-47990807

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