Contractual agreement
April 2012
Paul Clifton
The final four contenders for the £1bn Crossrail rolling stock contract have been revealed: CAF, Siemens, Hitachi and Bombardier – the latter being the only company that would build its trains in the UK if it won the contract. Paul Clifton looks at the issues surrounding the bidding process
The four shortlisted bidders for the Crossrail rolling stock and depot contract have been issued with tender documents. The structure of the process raised hopes that Britain’s last remaining train builder would win the contest, saving thousands of jobs directly and in the supply chain.
The four bidders for the £1bn contract are: Bombardier, Siemens, Hitachi and Construcciones y Auxiliar de Ferrocarriles (CAF). Around 60 trains will be required, each 200 metres long and capable of carrying 1,500 passengers.
The tender documents set out Crossrail’s requirements for a depot at Old Oak Common, along with air-conditioned, inter-connecting walk-through carriages. The contest had been delayed by a year and the contract will now be awarded in 2014. The first trains will run on the Great Eastern Main Line in 2017, with the fleet introduced on existing tracks well ahead of the opening of the central underground section of the Crossrail route.
Announcing the process, the transport secretary Justine Greening says she is ‘keen to understand and communicate the benefit of this contract to the UK economy’.
She added that bidders would be asked to specify from where each element of the contract would be sourced, and would also be ‘required to establish an appropriate local presence to manage the delivery of the contract’. Greening also says that she wants to ‘strengthen the capability of the UK supply chain’.
She explains: ‘This includes a “responsible procurement” requirement that means bidders will need to set out how they will engage with the wider supply chain and provide opportunities for training, apprenticeships and for small and medium-size businesses within their procurement strategy.’
London Mayor Boris Johnson says: ‘Crossrail provides London with a multitude of benefits, including a huge economic boost for our city. Thousands of jobs are being created through the construction of the railway, many of which will be through the manufacture of trains and depots. When up and running, Crossrail will single-handedly increase the rail capacity in our great city by a whopping 10 per cent and support regeneration across the whole of the capital.’
The procurement process has two rounds. In the first round bidders provide technical proposals and their approach to securing finance. At this point the bidders will be reduced from the current shortlist of four, with the remaining contestants providing fully funded proposals. Then a single preferred bidder will be announced.
Labour’s shadow transport secretary Maria Eagle says: ‘It is vital that major public procurement such as this is used to provide a boost to British jobs and growth, particularly at a time of rising unemployment. By including in the Crossrail procurement process a requirement for bidders to establish a local presence, engage with the supply chain and provide opportunities for training and apprentices, the government seems to have finally learned the lessons from the Thameslink fiasco, which saw British investment creating jobs in Germany and cost 1,400 jobs at Bombardier in Derby.
‘It is clear that the disastrous outcome of the Thameslink procurement was thanks to basing the decision on the bidders’ ability to raise finance, rather than their ability to build trains.’
Bob Crow, leader of the RMT union, says: ‘We will be monitoring the Crossrail process closely for any repeat of the Thameslink fiasco. We expect engineering excellence and socio-economic factors to be top of the tendering criteria to give Bombardier a proper chance this time around, unlike the loaded Thameslink scandal.’
Diana Holland, assistant general secretary of the Unite union, added: ‘The mistakes the government made almost closed Britain’s last train maker. At first sight, the procurement criteria for the Crossrail contract looks like an improvement.’
But Siemens has warned that the government must not bias its decision about the rolling stock in favour of the only British bidder. Although Siemens was named as preferred bidder for Thameslink last June, the contract has yet to be signed. That is expected to happen this spring.
UK head of Siemens, Steve Scrimshaw, told the Guardian that he was looking for ‘a fair playing field’.
He added: ‘Anything else would be anti-competitive, and could have long-term damaging consequences for a competitive Britain that is open for business.’
Scrimshaw also defended the outcome of the Thameslink procurement, which he said had been ‘fair and transparent’.
Hitachi has been preferred bidder for the next generation of intercity express trains for three years, though the contract has not been signed. The Spanish firm CAF recently won the contract to build new trams for the Midland Metro.
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