FirstGroup has lost the contract to operate the £2.5bn ScotRail franchise to Abellio, an offshoot of Dutch national railways.
The Aberdeen-based company said Transport Scotland had informed it that it would no longer run Scotland’s main rail service after battling with four rivals for the franchise. It will transfer operations and almost 5,000 employees to Abellio at the start of April after more than 10 years running the franchise.
Tim O’Toole,FirstGroup’s chief executive, said: “We have kept our promises and more for 10 years, delivering record levels of service including during this extraordinary summer in Scotland with the Commonwealth Games and the Ryder Cup. Our bid would have delivered even greater levels of service and growth, and we are disappointed we will not have the opportunity to implement the credible plans we submitted.”
The decision, to be announced by the Scottish transport minister, Keith Brown, , triggered a political row with unions condemning the awarding of the 10-year contract to an overseas company. FirstGroup shares fell by almost 6% in early trading, to 109p.