Arriva sues in fight for East Midlands rail franchise

The government is facing a double-whammy of legal action over its decision to award the East Midlands franchise to Abellio after Arriva Rail joined Stagecoach in taking it to court.

Abellio has been officially announced as the new operator of the franchise by Department for Transport and has confirmed it will invest £600 million to improve East Midlands railways.

Stagecoach's chief executive, Martin Griffiths, said last week his company had "no choice" but to pursue legal action against the DfT that it wanted to examine the "opaque decision-making".

Abellio already operates five other rail franchises in the country, notably Scotrail and Greater Anglia services between Norwich and London.

In early May, the government disqualified Stagecoach the current owner of the franchise as well as South Eastern and West Coast franchises, after the DfT raised concerns about its pension commitments.

Arriva said: 'We can confirm that we are seeking to obtain more information relating to how the bids for the East Midlands franchise were assessed, ' according to the Sunday Telegraph.

The DfT is maintaining its stance that it does not comment on legal proceedings.

The pensions regulator has warned that train operators face a pensions black hole of £7.5bn, whilst the RMT has threatened to strike over the deficit, and other train operators involved in the bids are also reportedly considering legal action.

Sir Richard, whose Virgin Trains is 49% owned by Stagecoach, said at the time that he was "devastated" by the disqualification.

The firm, which now runs the East Midlands franchise in partnership with Richard Branson's Virgin Trains, has said it would have been "reckless" to accept a risk it "can't manage". "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".

"Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered".