The government has lost a bid to strike out legal challenges from three rail firms that are contesting its handling of controversial franchise bids.
Last week The High Court gave Virgin, Stagecoach and Arriva Trains the green light to challenge former transport secretary Chris Grayling’s decision to ban them from bidding for the East Midlands, West Coast and South Eastern franchises.
The three firms were excluded from the competition for their refusal to accept open-ended pension liabilities with the government.
Dutch rail firm Abellio was awarded the East Midlands franchise, while Govia won an extension to the Southeastern franchise. The government is yet to appoint an operator for the West Coast franchise, which is currently run by Virgin and Stagecoach.
The three firms argue that the Department for Transport’s (DfT) decision to disqualify them from the franchise was unlawful. They are seeking an injunction to revoke the decision, damages, and a restarting of the competition.
At the time the DfT defended the decision, saying Stagecoach and Arriva knowingly submitted non-compliant bids are so were responsible for their own disqualification.
A DfT spokesperson said: “We do not comment on legal proceedings. However, we have total confidence in our franchise competition process and will robustly defend decisions that were taken fairly following a thorough and impartial evaluation process.”