Chairman Pip's Railway Thoughts

Spurious politico-speak

Posted in Business, Great Britain, Philip Hammond, Politics, Rolling stock by Chairman Pip on 5 July 2011

The fallout from the award of the Thameslink rolling stock contract to Siemens starts now. Bombardier have announced that up to 1400 jobs will go at the Litchurch Lane plant in Derby, of which more than 400 will be permanent staff as a result of completing the majority of outstanding orders by the end of September (only the S Stock order that will be complete by 2015 will be ongoing). The lack of work will lead to up to three of the plant’s five production lines being shut down, with no prospect of new orders anytime soon. It seems to me that these job losses are a direct result of losing the bids for both Thameslink and IEP; but, the Roads Man would have us believe that it is the end of these current orders that are the cause of it; they would have gone anyway. But how can that possibly be the case if Bombardier had gotten one of those two big orders? Even given the lead-in time for the design and build of the new trains, it’s still a case of production getting started quite likely within the next year and a half of the first units of the Thameslink order.

The DfT are using the excuse of “EU procurement rules” to hide from the tremendous fallout of this decision. It may well be the case that Siemens delivered “the most competitive bid” for Thameslink, but they can afford to given that they have a sizeable order book outstanding – if nothing else, it has a deal that could eventually be worth up to €6bn to supply Deutsche Bahn with new high speed trains to replace the ICE1 and ICE2 sets, and DB’s locomotive hauled intercity trains. Why something like this cannot be factored into the procurement process to me is a mystery. But it does mean that the government can’t live up to its own slogan “Made by Britain”. There is a suggestion that engaging in protectionism is not a good thing, even in instances of an economic downturn:

It is indeed depressing that the UK can’t rival the likes of Germany and Japan… That doesn’t mean we should erect barriers and accept second-best, however. Instead, we must up our own game.
David Crow, City A.M. Chief Political Commentator

Which would be fine if other markets allowed British manufacturing a fighting chance. But when was the last time a British train turned up on Japanese railways?

“Bombardier to shed 1400 jobs at Derby”
“What is Britain’s growth strategy?”
“Bombardier announces 1,400 job losses in Derby”


One Response

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  1. anna said, on 5 July 2011 at 4:54 pm

    I see the issue here as being something completely different. European procurement rules are not the problem it is the UK’s continual failure to manage large scale long term procurement which is evidenced in everything from defence to power to rail. Our approach of feast or famine means one can never sustain manufacturing in sectors which depend in winning regular large contracts. We go years without procuring anything then some massive orders get handed out then years of famine once again. Given the size of the UK’s heavy and light rail sector there should be at least two contracts forthcoming every year of a reasonable size that could sustain railway manufacturing in the UK if it was competitive.

    Why the Government is procuring rolling stock in the first place is a nonsense – privatise the rail sector properly and let government buy in services that cannot be delivered commercially if it wants without specifying what colour the rolling stock is.

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