Stagecoach Group PLC (LON:SGC) expressed shock and fury after being disqualified from the tender process for three rail franchises due to concerns over future pension funding despite having been shortlisted.
East Midlands has now been awarded to Dutch firm Abellio, while Stagecoach and its partners have also been ruled out of joint bids for South Eastern Trains and the West Coast Partnership.
Martin Griffiths, chief executive, said: "We are extremely concerned at both the DfT's decision and its timing.
Urgent meeting sought
“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.
Stagecoach said bidders for the franchises were asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme.
The Pensions Regulator is also seeking additional funding because of serious doubts over the Government's ongoing support for the industry-wide scheme.
“Without ongoing Government support for the long-term funding of railway pensions, The Pensions Regulator has indicated that an additional £5billion to £6billion would be needed to plug the gap in train company pensions.”
"In contrast, the rail industry proposed solution would have delivered an additional £500million to £600million into the scheme.
"We are shocked that the Government has rejected this for a higher risk approach. We would urge that full independent value for money review is undertaken into this issue without delay.
"Along with many other train companies, we believe strongly that the private sector should not be expected to accept material risks it cannot control and manage."
Stagecoach is the incumbent on the East Midlands franchise and made a sole bid to retain the franchise.
On the West Coast line, it has partnered with Virgin and SNCF, while on South Eastern it had jointly bid with French engineering firm Alstom.
Virgin added that it too was disappointed with the decision.
" We’ve led the industry for more than twenty years with our ground-breaking innovations, such as automatic delay repay, and award-winning customer service," said a spokesman.
Stagecoach shares were little changed at 130p.