Abellio awarded East Midlands rail franchise after Stagecoach disqualified

Abellio awarded East Midlands rail franchise after Stagecoach disqualified

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

It said Stagecoach did not accept the "risk-sharing mechanism" it had proposed for the three franchises and that it had "proposed significant changes to the contracts".

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

However one of the first problems which Abellio will face concerns East Midlands Trains' existing 40-year old HST diesel trains.

Stagecoach chief executive Martin Griffiths said he was "shocked" after the firm was told verbally by a senior official its bids were "non-compliant".

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 contract it already holds was handed to a Dutch state owned company, Abellio.

"We will continue, however, to press the Department for Transport for full electrification of the Midland Main Line so that we can enjoy lighter, cleaner, greener trains and closer integration with HS2 along the route".

Stagecoach has declared in their own response to the news that the private sector shouldn't be expected to bear long-term funding risks, and that the government was pursuing a high-risk strategy to fund the gaps.

It also was involved in joint bids with Alstom for London's much-criticised South Eastern commuter network and with Virgin Group and SNCF for the West Coast line running to Scotland.

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Sir Richard wrote: "Running the railway comes with many challenges and the West Coast Main Line was struggling when we took it over, but we were determined to turn it around".

The Pensions Regulator has estimated the United Kingdom rail industry needs an additional £5-6bn to plug the pensions shortfall, and the company said it was being asked to take on risks it "cannot control and manage".

The West Coast Partnership franchise is due to be awarded in June.

Virgin has operated West Coast services since 1997 and has a 90 per cent customer satisfaction rating, the highest for all long-distance franchises.

Stagecoach, which was shortlisted for East Midlands Rail, South Eastern Rail and the West Coach Partnership, said that its bid was "consistent" with industry guidance, however the DfT said the group had made "significant changes" to the commercial terms of the bidding.

Stagecoach had been bidding for this franchise independently.

It said the decision was evidence that the current system of rail franchising "was not fit for purpose".

Sir Richard Branson whose Virgin owns a 51 per cent stake in the venture has said he is "devastated" by the decision, adding: "This means that Virgin Trains could be gone from the United Kingdom in November". Passengers will also see faster journey times over its long-distance routes, as well as the introduction of a new express service from Corby, through to Luton, and on to London, an improved delay repay scheme, and "flexipass" tickets aimed at providing better value for money.

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.

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