(Reuters) - Britain’s competition watchdog said on Friday it was investigating the award of the West Coast Partnership rail franchise to FirstGroup (FGP.L) and Italy’s TrenItalia.
Last month, units TrenItalia UK and First Rail secured the British rail franchise that links London, Manchester and Glasgow. FirstGroup already operates the Great Western, South Western and TransPennine Express franchises.
The investigation, which follows the European Commission’s decision to refer the case to the United Kingdom, will consider whether the award of the rail franchise could lead to competition concerns, the Competition and Markets Authority (CMA) said.
TrenItalia and FirstGroup were not immediately available for comment.
FirstGroup is set to take over the franchise in December and operate trains on the High Speed 2 line planned for some similar routes.
The award of the West Coast Mainline contract to a joint venture, 70% owned by FirstGroup and 30% by TrenItalia, marked the end of Richard Branson’s Virgin Group involvement with Britain’s railways after more than 20 years.
Virgin’s West Coast partner Stagecoach (SGC.L) was disqualified from bidding for the new contract after it did not comply with rules over pension funding. It has challenged the bar.
Shares of FirstGroup were up 1.5% at 131.8 pence, as of 0832 GMT.
Reporting by Justin George Varghese in Bengaluru, Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips