UK gov’t scales back plans to buy Hitachi trains
The government said on Tuesday it would push ahead with a scaled-back version of its plan to replace its ageing Intercity Express trains, keeping a consortium led by Japan’s Hitachi as preferred bidder.
Shares in the industrial conglomerate were down 1.2 percent, outperforming the broader Nikkei index after the news that the deal had been cut back to 4.5 billion pounds from an earlier 7.5 billion pounds.
There had been fears the scheme, which would replace the diesel-powered trains dating back to the 1970s and 1980s, could be axed as part of a squeeze on government spending.
“I can now announce that I am resuming the IEP (Intercity Express Programme) procurement and proceeding with the proposal that Agility trains (the consortium) have put forward as preferred bidder,” Transport Secretary Philip Hammond said.
“We will now work with Agility trains with a view to reaching financial close by the end of this year,” he told parliament.
Hitachi had originally aimed to complete the deal by December 2009, but the previous Labour government delayed the scheme ahead of last May’s general election.
The British contract is key to Hitachi’s plans to break the dominance of the big three in the global railway market — Germany’s Siemens, Canada’s Bombardier and France’s Alstom.
The transport ministry said the 4.5 billion pound programme would provide 500 new carriages for the East Coast and Great Western Main Lines, with the first trains in service by 2016.
In February 2009, the previous Labour government had announced the investment in trains would be 7.5 billion pounds.
Under the plans, Hitachi will build the trains at a new factory in County Durham, northeast England, that will be in operation by 2013, creating 500 jobs, the ministry said.
The new rolling stock will be a mixture of all-electric and “bi-mode” diesel-electric trains.
The government would offer Hitachi conditional financial assistance to build the factory, Business Secretary Vince Cable said.
Hammond also announced a 704 million pound plan to extend the electrification of the Great Western Main line from Didcot, west of London, to Cardiff in Wales.
British infrastructure project manager John Laing is also part of the Agility consortium.
Source: Reuters