Sunday 28 April 2019 5:08 pm | Updated: Wednesday 22 November 2023 2:50 pm

French rail firm SNCF threatens legal action against government over failed HS2 bid

France’s state-owned rail company SNCF is threatening legal action against the UK government after it was barred from bidding from a contract to run HS2 in an ongoing dispute over pension liabilities.

SNCF is the latest firm to get caught up in a row over pensions, which prompted the Department for Transport (DfT) to bar Stagecoach and Richard Branson’s Virgin Trains from bidding for three rail franchises last month.

The DfT wants rail companies to share pension liabilities with the government, which Branson said would have been “reckless”.

SNCF had also teamed up with Stagecoach, which owns 49 per cent of Virgin Trains, to bid for one of the franchises, the West Coast franchise, the Sunday Times reported.

An SNCF spokesperson said: “We are disappointed by DfT’s decision to disqualify our consortium from the West Coast Partnership competition. We are frustrated that the main differentiator amongst bidders is their appetite for taking on risks – such as pensions – they can neither control nor manage, rather than their ability to successfully introduce HS2 while delivering outstanding customer experience.”

A DfT spokesperson 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.”

Earlier this month Virgin and Stagecoach said they were considering legal action against the government’s decision to spurn its bids for the West Coast, South Eastern and East Midlands franchises. The East Midland franchise, which Stagecoach currently runs, was awarded to Abellio.

The prospect of legal action from SNCF will be a further headache for transport secretary Chris Grayling, who is battling claims on all fronts from ferry firms who were not chosen for the government no-deal Brexit contract.

On Friday, ferry operator P&O said it was suing the DfT following its decision to grant Eurotunnel, which runs train services across the Channel, a £33m settlement after it complained that the procurement process for the no-deal Brexit ferry contract had been “secretive”.