ARRIVA has come to terms with the Department for Transport over the rejection of its bid for East Midlands on the grounds that its submission was ‘non-compliant’ in its attempt to modify pensions risks.

Stagecoach was also refused for the same reason, and the East Midlands contract was awarded to the only remaining bidder Abellio, which launched East Midlands Railway on 18 August last year.

Arriva was reported to be claiming £200 million for its exclusion, but it has now settled its claim as a High Court hearing starts in which Stagecoach, Virgin and SNCF are claiming damages for their rejection over West Coast Partnership, which was later awarded to FirstGroup and Trenitalia.

Stagecoach also lost its bid for South Eastern, and that competition has since been suspended.

Arriva said that it could confirm a settlement over East Midlands on ‘terms confidential to both parties’.

Meanwhile, the High Court has been told that the DfT was responsible for a ‘long series of missteps and mistakes’ while Chris Grayling was transport secretary between July 2016 and July 2019.

For the claimants, Jason Coppel QC said the Treasury eventually agreed to share the risk of more pension deficit increases, but officials from the DfT did not tell Chris Grayling about this change of heart. Mr Coppel also criticised the DfT for the amount of trial evidence that has been declared to be commercially confidential.

He alleged that the DfT is hiding a lot of information because it would be ‘embarrassing’ rather than confidential. The DfT said it would not be commenting about a legal case in progress, and the hearing is continuing.