TRANSPORT Secretary Geoff Hoon has dropped a broad hint that the consortium, including Derby-based Bombardier, that missed out on the £7.5 billion Intercity Express Programme contract may have bid too high a price.

The contract — for a new fleet of trains to replace ageing HSTs on the East C0ast and Great Western lines, and maintenance of the trains for 20 years — was awarded last month to another consortium, Agility Trains, which has Hitachi as its major shareholder. The others are John Laing and Barclays.

Last week the Transport Secretary visited Bombardier’s Litchurch Lane, Derby, factory and afterwards met trade union representatives.  They later said they had told Bombardier that the firm should include more British-sourced components in its bids to build new trains — not only to secure British jobs, but to keep costs down because of the reduced value of the pound.

Subsequently, Geoff Hoon answered questions put to him by the Derby Evening Telegraph, which has launched a campaign to get the Minister to change his mind and award the contract to the Rail Express Alliance, comprising Bombardier, Siemens of Germany, Angel Trains and Babcock & Brown of Australia.

He told the paper: “We have a process. That process depends on value for money. I know what the prices were. I can't tell you what they are because that would not be fair to Bombardier among others.

“But there was a significant difference between the two bids. And in the end, in the way in which we do these things, both legally in the UK and EU and indeed in the way these contracts are led, price is paramount.”

He added: “These are commercial contracts which are let on a strict value for money criteria and, therefore, price is always going to be a major consideration.”

Speaking of the Agility Trains’ bid and Hitachi’s long-term plans, the Transport Secretary said: “Bringing in a new railway factory, inward investment from one of the world's leading manufacturers of railway carriages, creating new manufacturing jobs does seem to me to help the economy, particularly when they are wanting to win orders across Europe, which is their ambition.”

And he explained: “The body shells are built from a very, very sophisticated welding system. Sadly, it is a welding system developed in the UK but it is now in Japan. They have invested in a plant so that you can push these shells through the plant, highly automated, highly sophisticated welding, which produces the body shells.

“Now, I would very much like that technology in the UK. They do use it at Litchurch Lane, but Bombardier can't invest in that kind of facility. But it's the shells we're talking about.

“The real value comes from the fittings, the electronics, all the things that go inside a railway carriage, which will be done in the UK. I accept that you are going to campaign vigorously for investment in the railways here [in Derby]. But, what's important is making sure Bombardier are in a position to win future orders.”

Mr Hoon said Bombardier had been chosen to build 120 new carriages for Stansted Express services. “They've got, incidentally, 2,000 orders currently. So that's going to provide work beyond 2010. There's also a major DMU train order [200 carriages] coming up. There's also an order for 1,200 Thameslink trains coming up.

“So the opportunities today for rail railway manufacturing could not be better,” he added.

‘Rotem pulls out’

ONE of the companies invited by the Department for Transport to tender for the construction of 200 additional coaches, Hyundai Rotem of Korea, is reported to have withdrawn.

Last week Rotem in partnership with Mitsui of Japan and Tokyu Car Corporation of Japan, was awarded a €140 million (£124 million) order by Irish Railways, Iarnród Éireann, for 51 new Intercity railcar carriages, making each carriage worth an average of more than £2.4 million.

The order will bring to 234 the number of Intercity railcars in the Irish fleet. Customer growth from the outer commuter routes from Dundalk, Longford and Kildare to Dublin — as well as the reopening of the Navan rail line in two phases — “necessitates an increase in rolling stock to satisfy the forecast growth in demand on new and existing routes,” said Iarnród Éireann.

The new fleet first entered service in late 2007 on the Sligo-Dublin line, and is currently rolling out across Ireland’s Intercity network.

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