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You can find the current article at its original source at https://www.theguardian.com/business/2019/apr/10/stagecoach-barred-from-rail-franchise-bids-over-pensions-row
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| Stagecoach barred from rail franchise bids over pensions row | Stagecoach barred from rail franchise bids over pensions row |
| (about 1 hour later) | |
| The government has blocked Stagecoach, the operator of some of the UK’s busiest railway lines, from bidding for three new rail franchises amid a furious row over pensions. | The government has blocked Stagecoach, the operator of some of the UK’s busiest railway lines, from bidding for three new rail franchises amid a furious row over pensions. |
| The transport secretary, Chris Grayling, has also been forced to further delay the award of its South Eastern franchise until at least November, in a written ministerial statement on Wednesday, in another blow to his embattled department. | |
| FTSE 250-listed Stagecoach will be removed from the East Midlands rail franchise, which it has run since 2007. The Dutch state-owned operator Abellio will take over in August for the next eight years. | FTSE 250-listed Stagecoach will be removed from the East Midlands rail franchise, which it has run since 2007. The Dutch state-owned operator Abellio will take over in August for the next eight years. |
| Sadiq Khan pushes for tube-style services on London's railways | Sadiq Khan pushes for tube-style services on London's railways |
| As well as the South Eastern franchise, Stagecoach will no longer be considered for the West Coast franchise, where it owns a 49% stake in the current operator with Virgin Trains. The new West Coast franchise, which runs from London to Glasgow, is due to be awarded in June. | As well as the South Eastern franchise, Stagecoach will no longer be considered for the West Coast franchise, where it owns a 49% stake in the current operator with Virgin Trains. The new West Coast franchise, which runs from London to Glasgow, is due to be awarded in June. |
| The decision prompted questions over the future of Stagecoach’s rail business after the government was forced to step in to run the East Coast franchise last year. Stagecoach could choose to exit the rail industry entirely after the Department for Transport’s “unprecedented” decision, said Gerald Khoo, an analyst at Liberum, an investment bank. | The decision prompted questions over the future of Stagecoach’s rail business after the government was forced to step in to run the East Coast franchise last year. Stagecoach could choose to exit the rail industry entirely after the Department for Transport’s “unprecedented” decision, said Gerald Khoo, an analyst at Liberum, an investment bank. |
| Stagecoach’s shares fell sharply in early Wednesday trading but recovered slightly to hit 128p, a decline of 3.8%. | Stagecoach’s shares fell sharply in early Wednesday trading but recovered slightly to hit 128p, a decline of 3.8%. |
| The government’s row with Stagecoach is centred on a big deficit in the Railways Pension Scheme. The Pensions Regulator (TPR) has said that up to £6bn may be needed to plug the gap but the train companies have insisted that the government support the scheme. | The government’s row with Stagecoach is centred on a big deficit in the Railways Pension Scheme. The Pensions Regulator (TPR) has said that up to £6bn may be needed to plug the gap but the train companies have insisted that the government support the scheme. |
| Stagecoach said the private sector should not be expected to bear long-term funding risks for parts of the Railways Pension Scheme, which invests more than £20bn for railway employees. | Stagecoach said the private sector should not be expected to bear long-term funding risks for parts of the Railways Pension Scheme, which invests more than £20bn for railway employees. |
| Martin Griffiths, Stagecoach Group’s chief executive, said he was shocked that the government had rejected its bid and he was heavily critical of the DfT’s process. | Martin Griffiths, Stagecoach Group’s chief executive, said he was shocked that the government had rejected its bid and he was heavily critical of the DfT’s process. |
| Griffiths said he was seeking an urgent meeting with the DfT to discuss the bid, with Stagecoach management only informed that they had been disqualified in a phone call from a civil servant late on Tuesday. | Griffiths said he was seeking an urgent meeting with the DfT to discuss the bid, with Stagecoach management only informed that they had been disqualified in a phone call from a civil servant late on Tuesday. |
| Griffiths said: “We are […] extremely surprised that the government still expects private operators to take risks they are not best placed to manage, despite the recent difficulties experienced by a number of operators of outsourced public sector contracts.” | Griffiths said: “We are […] extremely surprised that the government still expects private operators to take risks they are not best placed to manage, despite the recent difficulties experienced by a number of operators of outsourced public sector contracts.” |
| A spokesman for Stagecoach accused the DfT of “reckless government policy”, which could put rail operators out of business. | A spokesman for Stagecoach accused the DfT of “reckless government policy”, which could put rail operators out of business. |
| However, the government hit back, saying that Stagecoach was responsible for its disqualification. Abellio’s bid was compliant with the terms of the invitation to tender, the DfT said. | However, the government hit back, saying that Stagecoach was responsible for its disqualification. Abellio’s bid was compliant with the terms of the invitation to tender, the DfT said. |
| A DfT spokesman said: “It is entirely for Stagecoach and their bidding partners to explain why they decided to repeatedly ignore established rules by rejecting the commercial terms on offer.” | A DfT spokesman said: “It is entirely for Stagecoach and their bidding partners to explain why they decided to repeatedly ignore established rules by rejecting the commercial terms on offer.” |
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