CMA to investigate the award of the East Midlands rail franchise

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The CMA is investigating the award of the East Midlands rail franchise to Abellio East Midlands Limited.

A statement from CMA reads: “The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The news comes after Stagecoach Group confirmed in May that its wholly owned subsidiary, Stagecoach East Midlands Trains Limited, was taking legal action against the Department for Transport. At the time Martin Griffiths, Stagecoach Group Chief Executive, said: “We remain deeply concerned at the Department for Transport’s procurement of the three most recent rail franchise competitions and the rationale behind its decisions.

“Despite our continued requests for full transparency around these matters, many fundamental questions remain unanswered. As a result, regrettably we have had no option but to commence legal action against the DfT to ensure the serious issues involved and the DfT’s opaque decision-making are subject to proper public scrutiny.

“In view of the legal action we have taken today we believe it would be untenable for the DfT to proceed to sign  any contract for the East Midlands franchise without a full and proper review of the procurement of that  franchise to help restore public confidence in the process.”

Following this, Arriva became the second rail operator take legal action against the UK government after losing its bid to run the East Midlands railway franchise. The rail company wanted further information on how bids were assessed.

Abellio is 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. It plans invest £600 million in improvements for the East Midlands railway.