The flawed bid process at the Department for Transport (DfT) which cost FirstGroup (FG) the West Coast Mainline rail franchise will also hit the company's shareholders.
In its first half results announcement FG confirmed it was holding dividend payments at last year's level as a result of the uncertainty sprung on the group by the Government's decision to suspend all franchise competitions while it investigates the botched process.
The bus and rail operator said its underlying pre-tax profits for the period fell 42.4% to £48.7m - largely due to the absence of a one-off exceptional gain made this time last year on its UK Bus pension scheme.
Revenues rose 2.6% to £3.25bn but it was the decision to freeze dividends to shareholders at 7.62p per share that caught the eye among the figures.
The Government tore up a deal last month to award the West Coast contract to FirstGroup in a humiliating U-turn that led to three civil servants being suspended.
FirstGroup's share price has fallen 40% during 2012Ministers froze the award of other rail franchise competitions after the Department for Transport (DfT) said that "completely unacceptable" flaws had been uncovered in its handling of bids.
The decision was taken after Virgin Trains, the current operator, threatened court action after losing out in the bidding process.
Its founder Sir Richard Branson had labelled the award to FirstGroup "preposterous", claiming it would have threatened FirstGroup's financial future.
Virgin is continuing to run the London to Scotland route for a further nine months while the DfT plans a competition for an interim agreement.
Shares in FirstGroup have fallen more than 40% in 2012 - down 4% in early trading on Wednesday.
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