THE TRANSPORT SECRETARY has denied that the Thameslink rolling stock contract may be back in the melting pot, although the Government has admitted that it is looking at alternatives to completing the £1.4 billion deal for which Siemens was named preferred bidder in June last year.
Patrick McLoughlin was giving evidence to the Commons Transport Committee, who also pressed -- without much effect -- for more details about the collapse of the West Coast franchise competition. They were told by DfT permanent secretary Philip Rutnam that the names of those responsible, as well as many other details, cannot be revealed while inquiries are in progress and three DfT staff remain suspended, but the Committee was reassured that negotiations with Virgin to continue from 9 December are still going on. Mr Rutnam also said that he had not known the financial details of the bids until a late stage, because of the confidentiality rules which govern procurements, but repeatedly refused to say who had made the crucial decision to choose FirstGroup.
He said: "It may surprise the committee, but under the confidentiality arrangements that are in place for dealing with major procurements, commercially confidential information on the bids does not come to the permanent secretary or other senior officials until the end of the process.”
Mr McLoughlin did confirm the preliminary findings of the Laidlaw inquiry, which is examining how the competition collapsed. Committee chairman Louise Ellman said its conclusions could only be described as a 'damning indictment'.
The transport secretary said that 'the mistakes which had been made should not have been made, and were very regrettable'. He also acknowledged that the implications were 'very serious' for the Department. Apologies had been made to bidders and taxpayers, 'who had the right to expect better'. But he also said that the Laidlaw criticisms affected only one section of the DfT, and that he did not think it was right to condemn the whole Department, which included 'many hard-working people'.
Critics have suggested that the failures of the West Coast process could also have affected the long-delayed Thameslink rolling stock contract in a similar way, but Mr McLoughlin did not accept this, and maintained that he was still expecting to complete the deal early in 2013.
Siemens is involved in complex negotiations with sources of private sector finance, and financial close on the deal has been postponed repeatedly. Theresa Villiers gave a written answer to the House of Commons on 3 September this year – her last day as rail minister – in which she predicted that the contract, which is for some 1,100 vehicles, would be signed ‘early this autumn’.
Just nine days later, as new transport secretary Patrick McLoughlin gave evidence to the Transport Committee, in which he said “we certainly hope to sign the contract by the turn of the year”.
His rail minister Simon Burns moved the deadline forward again on 25 October, when in a written answer to a question from Derby MP Chris Williamson, he said: “Department officials are working with Siemens to secure financial close early in the new year for the new trains for Thameslink. I am aware of the consequences of failing to conclude the procurement and as you would expect, my Department is closely monitoring progress, including assessing options were it not possible to secure financial close.”
But the admission that alternatives are being considered cast doubt on whether the deal can be concluded, and prompted fresh calls for the contract to be offered instead to Bombardier, which is reserve bidder and would built the fleet in Derby.
The general secretary of the RMT Bob Crow said: “The game is clearly up for the Siemens/Thameslink deal which is riddled with the same contamination and incompetence as the West Coast main line fiasco. The Government should now be forced to hand this work over to Bombardier in Derby saving thousands of key manufacturing jobs and calling a halt to this 18 months of shame.”
However, Siemens insisted that although the contract may be running late, it is still viable. UK managing director Steve Scrimshaw said: “The Thameslink negotiations are ongoing and although we are disappointed that they have taken longer than anticipated, we are making good progress and we remain confident that we will achieve closure of this important deal.
“Our project team is in detailed negotiations with the Department for Transport and in daily contact with them and other key stakeholders.
“Depending on progress over the next month or so, we hope to achieve commercial close by Christmas with financial closure in the New Year. We are already well advanced with our plans for the start of vehicle testing later this year.”
Bombardier has not commented.