SNP leader says party will use devolved powers under Scotland Act 2016 to alter franchise rules if re-elected next month

Public sector bodies will be able to bid to run Scotland’s railway next time the franchises come up for renewal, the Scottish first minister, Nicola Sturgeon, has said.

Before next month’s Holyrood elections, the SNP leader announced that her party would enact legislation, under new devolved powers of the Scotland Act 2016, to alter the “absurd” franchise rules that excluded the public sector in the UK from running trains but allowed a Dutch state firm to operate ScotRail instead.

Sturgeon announced the policy, which echoes a promise in Labour’s general election manifesto last year, in a speech to the Scottish Trade Union Congress conference on Tuesday.

While unions have been pushing for a fully renationalised rail sector, she said that devolved powers would restrict the SNP to this limited, but significant step.

The push for a public-sector operator has gained traction since the success of East Coast trains, linking London and Scotland. The state-owned company paid more than £1bn in premiums to the Treasury between 2009 and 2015, although the Westminster government ensured the service was returned to the private sector before the last election.

Sturgeon told the unions: “We have long argued, with your support, against the absurd position that sees public sector operators from other countries able to bid to run public rail services in Scotland, but our own public sector unable to do so.

“One of the recommendations of the Smith commission was that Holyrood should have the power to change that. We will continue to have to tender services – it will not be within our gift to change that. But our manifesto will make clear that a re-elected SNP government will use new powers to change the law to ensure that in future a Scottish public sector body will be able to bid to run Scotland’s railways.”

However, the main Scottish franchise, ScotRail, may not come up for renewal until 2025, and there has been some scepticism about the SNP’s desire for a public-sector operator.

The contract was awarded to Abellio, a subsidiary of the Dutch state-owned rail company, in late 2014 to start in April 2015. In the first year since Abellio took over from transport multinational FirstGroup, ScotRail has been criticised and fined over the cleanliness and punctuality of its trains and platforms.

Labour and unions had argued that the 2014 award could have been frozen until after devolution, to allow more public control. Scottish Labour leader, Kezia Dugdale, told the STUC conference that Labour would “bring ScotRail under public ownership”, although they would also be limited to supporting a public bid for the franchise under devolved powers.

Scottish Labour argues that its commitment to public control of transport is reflected in its pledge to regulate bus services and introduce a national smart ticketing system – a policy dropped by the SNP, whose major donors include Brian Souter, chairman of Stagecoach.