DfT response to Stagecoach ‘vague and incomplete’

Updated 07.50 18 April

THE Department for Transport has responded to the demand from Stagecoach Group for a ‘prompt, full and transparent response to help restore public confidence’ after three franchise bids from the Group were rejected on the grounds that they were ‘not compliant’ with DfT requirements concerning pension funding.

It had been reported that the deadline was 16.00 on 16 April, but Stagecoach has now clarified that the deadline was actually 24 hours earlier, and that a response has been received.

However, the matter appears to be far from settled.

A spokesman for Stagecoach said: ‘We can confirm we have received a letter from the DfT, which we are reviewing in detail. However, we consider the response to our questions to be both vague and incomplete, leaving many of the fundamental issues and concerns raised by ourselves and other parties unaddressed.’

Stagecoach has been told that its bids for East Midlands, South Eastern and West Coast Partnership have all been rejected, because its alternative proposals for pensions were not acceptable to the government. The company said ‘we refused to accept the transfer of significant potentially unmeasurable pension risk’.

The full texts of the letter from Stagecoach and the DfT’s response have not been published.

It has been confirmed that Arriva was also barred from continuing with its bid for East Midlands, again because it had apparently attempted to amend the pension clauses in the proposed contract for the same reasons as Stagecoach, leaving Abellio as the only contender.

The DfT said: ‘Arriva chose to propose significant changes to the commercial terms for the East Midlands contract, leading to a bid which proposed a significantly different deal to the one on offer. The result is that they are responsible for their own disqualification from the competition in line with the terms of the published ITT.’

Stagecoach has asked that the confirmation of the Abellio award, which would normally follow after a ten-day standstill period, be delayed by a further fourteen days. It is not yet known whether the DfT has agreed to this.

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