Posted 30th August 2011 | 6 Comments
Crossrail delay for train procurement rethink
THE GOVERNMENT is to postpone the procurement process for 60 Crossrail trains by several months, to allow its purchasing rules to be re-examined.
The reaction by transport secretary Philip Hammond follows the wave of protests which greeted his decision to award the £1.4 billion Thameslink fleet contract to Siemens.
The procurement of the Crossrail fleet had been scheduled to begin towards the end of this year, but will now be held up until 'early' in 2012 so that the rules which govern the awarding of major contracts can be put under the spotlight.
Crossrail said that the delay in procurement will not affect the scheme as a whole. Bombardier is one of the four companies shortlisted to build the trains for the new east-west line under London: the others are CAF, Hitachi and Siemens.
The issue facing the government is how much national interests can properly be considered when major buying decisions are made, while still keeping within European law.
Commentators have pointed out that other European countries such as France and Germany usually require their trains to be built locally, even if the company winning the order is foreign-owned.
The Thameslink decision disregarded the possible effect on jobs in this country, and was probably crucially influenced by the offer of a more cost-effective train leasing deal from Siemens, but there have been warnings that the award could mean the end of train-building in Britain, with Bombardier now reviewing its businesses across the country.
The Canadian-owned company has already announced that it is shedding some 1,400 jobs at its plant in Litchurch Lane, Derby, where the Thameslink fleet would have been largely built, but there have been warnings that up to 20,000 jobs could be lost if Litchurch Lane were to close entirely.
Not only would another 1,600 jobs go as a direct result, but many more would be at risk in the supply chain. Derby still has one of the biggest clusters of railway-related businesses in Europe, with its suppliers' association the Derby & Derbyshire Rail Forum boasting around 90 local members.
While the government prepares to look at its procurement rules again, bids to get the Thameslink decision reversed are still continuing.
A major public meeting is taking place in Derby on Thursday evening, and next week protestors will be travelling from Derby to London by special train on 7 September, when the House of Commons Transport Select Committee will be taking evidence as part of its inquiry into how rolling stock procurement is carried out in the UK.
Meanwhile, the Thameslink procurement process is also coming under the spotlight in an inquiry by the National Audit Office, which is expected to publish its preliminary findings in October. If the NAO finds flaws which it believes justify further examination, it will move on to staging a full inquiry into whether the deal did, in fact, offer best value for money, as ministers have claimed.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Melvyn Windebank, Canvey Island< Essex, England
Time this order is placed we wont have a domestic train builder to build these trains!!
The reality is countries like France order large quanties of trains and then have follow on contracts to buy more trains from their own domestic builders. While we wait years to order trains and then think 30 trains is a big order and then need to go out to tender for each order.
While in London instead of getting on with ordering the Piccadilly Line trains as a follow on to the "S" stock Boris has delayed the order which will mean no work for Bombardier and by the time the trains are ordered Derby may not be there.
Given the fact the railways were privitised its odd how the government still has so much control that even small orders have to be agreed by the D(a)FT.
Stephen, Luton
Even if Siemens is preferred bidder, can the government not specify the trains must be constructed in the UK? If Siemens cannot do this, maybe there is a way they can subcontract to Bombardier Derby?
phil gaskell, manchester, uk
is it possible the government are finally seeing sense. i doubt it. since british rail went public it has cost the tax payer even more {ie us}
Dave, Nottingham, UK
This government does not have a clue.
Lutz, London
The reason is that the UK has a tenancy to play by the rules, whereas others in the EU will not only work around the loop holes in said laws, but also make sure that the loop hoes exist at the time the laws are drafted.
Lee, Manchester, England
Why does our government have to reassess european law to see if it is possible to favour locally built rolling stock when most other countries in Eurpoe insist on this? Why does our government have such a hard time implementing the same laws the rest of Europe allegedly do? Why is it so difficult for our government to look after the best intersets of the population by maintaining jobs? When the government refers to 'best value for money', why doesn't it simply say cheapest?