Oral Answers to Questions
Debate between Simon Burns and Chris Williamson(11 years, 11 months ago)
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Chris Williamson (Derby North) (Lab)
4. What recent progress he has made on the Thameslink and Crossrail rolling stock contracts; and if he will make a statement.
The Minister of State, Department for Transport (Mr Simon Burns)
We aim to reach financial close on the Thameslink rolling stock contract early this year. The Crossrail rolling stock procurement is a live procurement exercise being run by Crossrail Ltd. It is due to announce the de-selection to two bidders in spring this year, with contract award expected in spring 2014.
Chris Williamson
The Chancellor says it is essential to cut unnecessary public expenditure, but the review of the inter-city express programme by Sir Andrew Foster shows that the Thameslink rolling stock programme will cost hundreds of millions of pounds more than necessary. How can the Transport Secretary justify wasting British taxpayers’ money to create highly skilled manufacturing jobs in Germany when he could have re-run the procurement process in a matter of months, with a tender process that better ensured that this massive investment of taxpayers’ money led to manufacturing jobs in Britain? I am worried that the same thing is going to happen with—
Mr Speaker
Order. We are grateful to the hon. Gentleman; we have got the gist of it.
HEALTH
Debate between Simon Burns and Chris Williamson(12 years ago)
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Mr Burns
In that spirit, I hope that any meetings we have would be positive so that we could make progress.
I now turn to the contribution from the hon. Member for Derby North (Chris Williamson) about rail procurement and Bombardier. The coalition Government are committed to continuing to invest in rail, building on its success and facilitating future economic growth. As he knows, we are investing £18 billion in this spending review period alone on a programme of rail improvements as large in scale as anything seen since the Victorian era. I am aware that the hon. Gentleman, as well as my hon. Friends the Members for South Derbyshire (Heather Wheeler), for Mid Derbyshire (Pauline Latham), for Erewash (Jessica Lee) and for Amber Valley (Nigel Mills) have been active campaigners on behalf of Bombardier, which has a key role in Derby’s economy.
Therefore, I am pleased to be responding to this debate shortly after Southern has announced its intention to exercise an option for 40 additional rolling stock vehicles to be delivered by Bombardier in 2014. Furthermore, Southern is working with the Department to develop proposals for a potential competitive procurement for 116 new vehicles, including options for further vehicles. Ministers expect to be able to make a further announcement on this matter shortly. Bombardier is also among the shortlisted bidders for the Crossrail rolling stock procurement.
These procurements offer Bombardier and other train manufacturers new opportunities to bid for work. The Thameslink rolling stock contract is complex, as the hon. Gentleman understands, and it introduces much greater responsibility for the train’s performance in service on the part of the train manufacturer and maintainer than is traditionally the case. Therefore it has—quite rightly— taken some time to get the details right. Siemens and its partners in Cross London Trains have been working very closely with the Department for Transport to reach commercial agreement on the Thameslink rolling stock project. I am pleased to say that there has been substantive progress in recent weeks and the Department has now reached commercial agreement on the key elements of the deal with the Cross London Trains consortium. Last night the Cross London Trains consortium published its information memorandum to potential funders.
This important milestone enables the next stage of the process of further engagement with the debt market to continue to put the necessary financing in place for the deal. Our target, once the necessary credit approvals have been secured, is to reach financial closure as soon as possible in the new year. I hope that hon. Members will appreciate the importance of the statement I have just made, which is crucial as part of the continuing investment in improving and enhancing the infrastructure and performance of our railways.
In passing, I note that the hon. Gentleman suggested that the same civil servants who were responsible for the franchising deal for the west coast main line were working on the procurement deals, but I can assure him that that is not the case. I hope that that reassures him.
Regarding the Crossrail rolling stock contract, we are clear that our priority is to secure the right train at the right price, through a strong and fair procurement competition. This competition is different from rolling stock procurements such as Thameslink that were launched by the previous Administration. It has taken account of the package of measures to reform public procurement announced in the 2011 autumn statement, and it also includes, for example, the commitment of £350 million of public investment to this £1 billion programme. Four bidders—Bombardier, CAF of Spain, Hitachi and Siemens—have submitted initial bids. Crossrail Ltd is responsible for the procurement and is currently assessing bids received at the end of October.
Chris Williamson
Will the Minister confirm whether credit ratings will be a significant factor in determining the Crossrail contract, and whether there will be an announcement in this Chamber on the financial close of the Thameslink contract?
Mr Burns
On the hon. Gentleman’s second point about the final part of that process, we expect a conclusion early in the new year, though I cannot provide a precise date at this point. On Crossrail, as I said to him earlier, the procurement contract is going ahead and normal processes will be abided by and gone through. It is premature at this stage to start speculating on the detail of future processes, because there is an element of commercial confidentiality and the deals, checks and balances that one would expect from a normal major procurement of this nature.
The Crossrail procurement is the responsibility of Crossrail Ltd. It is currently assessing the bids received at the end of October. I expect that all bidders will have submitted strong, competitive bids that meet the exacting requirements of Crossrail, while providing best value for money for the UK taxpayer and future fare payers. Crossrail and Thameslink will have a transformational impact on travel in London and the south-east. They will significantly boost jobs and growth more widely in the economy. Their benefits are vital and urgently needed, and the Government remain firmly committed to their delivery.
The hon. Member for Islington North mentioned a number of other issues. I will write to him about them, except to say—this will come as no surprise to him—that I do not share his enthusiasm for what would in effect be a renationalisation of the railways.
I should like to ensure that the House is fully aware of what is being done to help Bombardier and Derby. The hon. Member for Derby North will be aware that Bombardier recently secured a £188 million bid to build 130 new railway carriages following a procurement competition run by Southern Railways. Last week, Southern Railways announced that it was exercising an option to invest in 40 new Electrostar carriages from Bombardier. Bombardier is among the suppliers who have bid for the new Crossrail rolling stock, which I referred to earlier, but as the procurement process is live it would be inappropriate to go into details. The Department for Transport is working to develop proposals for a further procurement of 116 rolling stock vehicles, which Southern, if it goes ahead, will be able to bid for. Through its talent and expertise, Bombardier has secured a considerable amount of work. There are a number of significant opportunities for it to seek to make more procurement bids successfully, which would lead to a bright future for the company. If it secures all the potential bids, it will help it to strengthen its capabilities and work force, and allow it to develop its potential.
In conclusion, the Government do not just talk the talk, they walk the walk. In the past two and a half years, we have invested record amounts of money—billions of pounds—to play catch-up from the failure of successive previous Governments to invest in our railway infrastructure, so that we have a first-class, fit-for-purpose railway network that can compete with our European competitors and ensure that we get a higher standard of journey for passengers and more freight on to the railways. In recent years, since privatisation, we have seen freight on our networks increase by 60%, with all the benefits that follow on from taking the freight off our road networks. [Interruption.] On the prompting of one of my hon. Friends, I would like to wish you and the staff, Mr Deputy Speaker, a very happy Christmas, secure in the knowledge that we are investing significantly to improve our railways. If you are returning to your constituency for Christmas on the west coast main line with a Virgin train, I wish you a prompt, enjoyable and speedy journey.
General Matters