Dutch rail operator Abellio has been awarded the East Midlands Railway franchise, while UK firm Stagecoach was disqualified from the competition because of a row over pensions.
Passengers will benefit from new trains with more peak-time seats, reduced journey times and more than £17 million of station improvements, the Department for Transport (DfT) said.
Abellio will take over the East Midlands route – which includes the Nottingham-Grantham-Skegness route and Liverpool-Grantham-Norwich on August 18 until August 2027.
Stagecoach, which currently operates East Midlands Trains, said it was informed by the DfT that it has been banned from three franchise competitions – East Midlands, South Eastern and West Coast Partnership – for submitting non-compliant bids “principally in respect of pensions risk”.
Bidders for the franchises were asked to bear the full long-term funding risk on relevant sections of the Railways Pension Scheme, Stagecoach said.
It added that the Pensions Regulator is seeking additional funding because of “serious doubts” over the Government’s ongoing support for the industry-wide scheme.
Stagecoach chief executive Martin Griffiths said: “We are extremely concerned at both the DfT’s decision and its timing. The Department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.
“The Pensions Regulator has indicated that an additional £5 billion to £6 billion would be needed to plug the gap in train company pensions.”
The rail industry proposed solution would have delivered an additional £500 million to £600 million into the scheme.
This, Mr Griffiths said, would have provided “better stability and security for members” and better value for taxpayers.
“We are shocked that the Government has rejected this for a higher-risk approach. We would urge that a full independent value-for-money review is undertaken into this issue without delay.”
A DfT spokesman said: “Stagecoach is an experienced bidder and fully aware of the rules of franchise competitions.
“It is regrettable that they submitted non-compliant bids for all current competitions which breached established rules and, in doing so, they are responsible for their own disqualification.
“Stagecoach chose to propose significant changes to the commercial terms for the East Midlands, West Coast Partnership and South Eastern contracts, leading to bids which proposed a significantly different deal to the ones on offer.”
“We have total confidence in our process. We have awarded the East Midlands franchise to Abellio after they presented a strong, compliant bid.”
Cllr Richard Davies, Executive Member for Highways and Transport, said: “The county council has worked closely with Transport for the East Midlands and other EM local authorities to secure the best deal possible for the East Midlands as a whole.
“There is a lot of good news for the county, and it looks like the new franchise will introduce a lot of the improvements we’ve been calling for.“
He said there are major improvements, especially for services involving Lincoln.
“There are improvements planned for services between Lincoln and Peterborough, which will be of particular benefit for not only Sleaford and Spalding, but also the smaller stations on that route, such as Metheringham and Ruskington.
“Another welcome addition is the recognition that the franchise needs to do more for Skegness during the busy summer season and around major events, such as the Lincoln Christmas Market.
“And these are just the improvements that were required by the Department for Transport. We may find that Abellio have gone even further in their bid once the full details are released.
“There has been good growth in rail use across the county in recent years, and it’s important that rail services adapt to meet that increasing demand. Today’s announcement appears to be a step in the right direction.”
Abellio are whole owned by the Dutch state-owned national rail operator and currently operate the East Anglia, ScotRail, West Midlands Rail, London Northwestern and Merseyrail franchises in the UK.
I know I complain a lot, but for pity’s sake can’t we run our own bloody trains in this country?
Didn’t we in the 19th century invent the railways, wasn’t Stevenson’s Rocket one of the first train names we learned when we were children.
Too many smooth smart arses in suites selling the country down the river.
We now turn to the Dutch to run our East Coast trains………..
Gotta say they very “Slick” shame but again its just lost it in the UK & dont want to ever be as “Apathetic” As man thinker But hearin what he is on about at-times!