February 27, 2012 11:09 pm

Crossrail tender favours UK

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Ministers will on Tuesday launch the tender for a £1bn contract to supply trains for the Crossrail project with the government aiming to “level the playing field” for UK-based manufacturers.

The coalition is seeking to load the process as far as legally possible towards a UK factory from the outset following a public outcry last year over the decision to award a £1.6bn train order for the cross-London Thameslink route to a German factory owned by Siemens.

The losing bidder in that tender was Bombardier, the Canadian owner of the UK’s last remaining train factory, which subsequently axed about 1,500 of its 2,800 staff. Bombardier is one of four shortlisted bidders for the Crossrail trains – which will run on a new fast rail link between east and west London – along with Siemens, Hitachi of Japan, and CAF of Spain.

While the tender will not have an explicit “made in Britain” clause, the document will require bidders to explain how their proposal will benefit the UK economy.

“This is using the techniques of France and Germany and levelling the playing field,” said one person familiar with the contract, referring to the perception that those countries do more to help domestic bidders in tender processes. “A company would have to be incredibly naive to think they could get away without looking at how the UK economy was going to benefit from this procurement.”

KEEPING TRACK

At £14.8bn, Crossrail is Europe’s largest construction project by value, linking Maidenhead and Heathrow west of London to Shenfield and Abbey Wood to the east of the capital. It excludes the cost of rolling stock.


The 118km (73 miles) rail link will run through new large twin tunnels under the capital and involves building nine new stations along the route.


Tunneling work starts next month when the first of eight, £10m boring machines begins excavation work in west London


The £1bn plus tender launched on Tuesday is for 600 carriages that will make up the 60 trains that are due to enter service on the route from late 2018


Each 200m-long train will have capacity for 1,500 passengers. At peak times Transport for London, which runs the project jointly with central government, plans to run up to 24 services per hour in the central part of the link between Paddington and Whitechapel.

After the Thameslink furore, the government promised to do what it could to ensure future procurement contracts gave some weight to companies with UK manufacturing presence while remaining within EU procurement law, which are designed to prevent protectionism

The Crossrail tender will specify that every bidder must set out how it will provide training, apprenticeships and work for smaller suppliers. This section on “responsible procurement” will also require bidders to specify where each part of the 60 new trains will be sourced.

Of the four shortlisted bidders, only Bombardier has a UK manufacturing and design presence, although Hitachi is due to build an assembly plant in the north-east of England as part of its long-delayed £4.5bn contract to build Intercity express trains for the East Coast and Great Western main lines.

Bombardier said it was always at a disadvantage to Siemens in the Thameslink bid as it was heavily weighted towards financing and the German manufacturer had a better credit rating because it had its own financial services arm. Siemens has always dismissed the claim but executives at Bombardier’s rivals are growing increasingly concerned about politicisation of the Crossrail project.

Financing for the Crossrail deal will include 30 per cent public sector financing as opposed to Thameslink, which was 100 per cent funded through a private financing initiative.

The Crossrail rolling stock tender is likely to exceed £1bn as it is expected to be let as a 32-year concession with the winner also maintaining the trains.

Bombardier put the future of its Derby site under review after its Thameslink loss but has since received government support to secure fill-in work to keep the plant open for three years and allow it to rehire 200 workers.

But the Canadian company renewed its threat to close the plant earlier this month if it did not secure the deal to build the 600 carriages for Crossrail, which is due to open in 2018.

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