Serious concerns over transport commissioning – how will Greening respond?

Matt Dykes is the TUC’s public transport policy officer

The publication today of the transport select committee report on Thameslink rolling stock procurement is a vindication of the concerns that the TUC and rail unions have raised repeatedly with successive ministers over the last eighteen months.

Chief among its findings are:

• Rolling stock procurement is characterised by periods of feast and famine, the current era being one of famine.

• As well as the consequences for jobs and skills, the loss of UK train design facility is likely to have long term adverse implications for the cost of the railway, given the specific design requirements of UK trains.

• There are now few defenders of the previous government’s decision to exclude socio-economic criteria from the procurement.

• Siemens’ A+ credit rating made a significant contribution to its success.

These points were all raised by the TUC delegation that met with Justine Greening last week. Unions continue to press for a reversal of the decision, with postponement of the contract award until next year there is still scope to do this.

The select committee believes that the process was so flawed that it recommends an independent review by the auditor general to report to Parliament in 2012.  As the contract award continues to face delays, speculation mounts over the Siemens/XL consortium’s ability to secure capital in a rapidly deteriorating credit market.  Under these circumstances, the government must be duty bound to the taxpayer to review the contract.

The government refuses to reverse the decision. Delays to the planned 2015 – 2018 delivery schedule are mooted as the reason for this, though no explanation has been given for the government’s estimate of a two year delay, particularly in the light of a significantly shorter review period for the Inter City Express contract.

With the government refusing to move on Thameslink, the case must also made for bringing a combination of rolling stock opportunities to market to keep Bombardier in the game.

Again, the select committee makes a similar point, arguing that the government should:

Assist the UK train building sector in finding opportunities for work before the next major train procurement projects are completed.

And reflecting the TUC’s position, the committee ask whether the “medium term procurement plans mentioned in the Chancellors’ autumn statement will include a plan for rolling stock”.

A number of rolling stock opportunities have been identified that might benefit Bombardier, with new stock requirements for the Southern and Cross Country franchises as well as London Underground’s Piccadilly and Central Lines.

The DFT could also review service level agreements with current train operators to see if amendments are required to enable new orders for rolling stock. And refurbishment orders could be brought forward to make all existing stock compatible with EU disability access regulations prior to their 2020 deadline.

Despite Justine Greening’s assurance that there are “opportunities on the near horizon” little detail has been forthcoming so far. Although it is interesting to note the inclusion of Southern Trains in HM Treasury’s National Infrastructure Plan 2011 released at the time of the autumn statement.

Crossrail, of course, remains the big one and it’s encouraging to note that the terms of procurement are under review.  However, recent news that the government have opted for a similar build and finance package used on Thameslink shows that few of the lessons have been learned. As the select committee point out:

Bundling train manufacture and financing together in procurement skews the market towards larger multinational firms, possibly at the expense of excellence in train design and domestic manufacturing.

It beggars belief that at a time when the government boasts of its reduced borrowing costs it will plough ahead with a private finance option for Crossrail that will advantage our competitors and escalate long term costs to the taxpayer.

Bombardier announced 1,400 job cuts on the back of the government’s decision to award the Thameslink contract to Siemens of Germany and there will be thousands more through the supply chain across the UK.

Most of the temporary contracted workers at the plant have now left and anxiety among the remaining workforce and local community is increasing, as Bombardier Inc continues to review its UK operations. Far from being yesterday’s news, the situation at Bombardier is growing in urgency.

While the government has made positive noises about reviewing its procurement strategy, with a “sharper focus on the UK’s strategic interest”, the workforce at Bombardier needs action now. The government has the means to deliver but does it have the will?

• Government may yet see sense and throw a lifeline to Bombardier – Matt Dykes, September 13th 2011

• Bombardier decision threatens thousands of supply chain jobs – Neil Foster, September 6th 2011

• Tories face fierce ‘Bombardier backlash’ in key marginals – Neil Foster, August 22nd 2011

• How the Government could keep train fares down – Richard Hebditch, August 16th 2011

• Train journeys from Hell: What is to be done? – Alexandra Woodsworth, March 23rd 2011