Professional Engineering

The row over the government’s controversial decision to award the Thameslink train-building contract to German company Siemens instead of to Derby-based Bombardier continues to rumble on.

Turbulence in the financial markets and the collapse in the value of the euro means that the cost of the contract has increased. 

During a series of parliamentary answers to Derby North Labour MP Chris Williamson, it emerged that the Siemens bid was placed in euros, a currency that has seen a 10% decline in value since tendering. So the cost to the taxpayer of the £1.4 billion contract has increased by £140 million.

In the light of this information, the Rail, Maritime and Transport union has renewed its calls for the contract to be taken from Siemens and awarded to Bombardier. 

In a damning statement, RMT general secretary Bob Crow said: “The catalogue of failure behind the betrayal of Bombardier has sunk to a new low with the taxpayer now expected to subsidise Siemens to the tune of £140 million.”

The RMT has been saying for months that the chaos in the financial markets has delayed the sign-off on the deal. Now that it has been proved right, it says that the government should “cut the lies” and give the contract to the Derby workforce, who are geared up and ready to go.

A report by the House of Commons transport committee says that if the government is to continue with the Siemens deal it should publish the reasons why it chose the company over Bombardier. The difference in the cost of the two bids should also be made public, says the report.

Louise Ellman, chair of the transport committee, said: “We could not evaluate whether the decision to choose Siemens was arrived at correctly because all of the bids were and remain confidential. We believe that in the public interest an independent review must evaluate whether this massive contract was correctly awarded on the basis of the criteria in the original invitation to tender.” 

The committee called for the findings of such a review to be presented to parliament by mid-2012. The MPs agreed that the criteria used in the procurement were too narrowly drawn and that Siemens’s A+ credit record was a “significant” contributor to its success. The report said: “We are concerned that bundling train manufacture and financing together in procurement exercises will skew the market towards larger multinational firms, possibly at the expense of excellence in train design and domestic manufacturing.”

Prime Minister David Cameron has waded into the debate, conceding that the government could do better at keeping big procurement deals local in the future. He said: “We need to see government as a better customer, talking to its suppliers, telling them what’s coming down the track, helping them to plan.” He added that the French and German governments are better at sourcing from their own suppliers than the UK is. 

But, as the previous and current transport secretaries have said they have no intention of starting the procurement process again, it may be too little, too late for Bombardier.