Stagecoach wins East Midland rail routes

LONDON (Reuters) - The Department for Transport said on Friday that bus and rail firm Stagecoach had won the contract to operate rail routes in England's East Midlands.

The DfT said the new franchise will begin on November 11 and run until April 2015, though it has the right to terminate the deal after six years if Stagecoach fails to meet performance targets.

The DfT will pay a subsidy to Stagecoach in the early years of the deal, although over the seven year and four month contract Stagecoach will pay the DfT around 133 million pounds.

Stagecoach said the deal was worth 235 million pounds in annual total revenues.

The DfT said Stagecoach would have to compensate travellers for delays to individual journeys rather than for overall poor performance. It added that the firm would be allowed to increase ticket prices by 3.4 percent a year on top of inflation on unregulated fare routes, while regulated routes would see fares rise up to 1 percent a year above inflation.

Rivals Arriva, FirstGroup and National Express had also been invited to submit bids.

The bulk of the new East Midlands franchise is the previous Midland Mainline franchise which was run by National Express.