Hitachi deal raises too many questions

The attempt to spin the Hitachi train deal as a British-led consortium clearly backfired given this morning’s press coverage.  As ever, thanks to the convoluted way that we do things in this country, what should be a straightforward good news story ends up being a complex tale of seemingly impenetrable deals that are impossible to evaluate.

Take the headline figure of £7.5bn. On the face of it, that seems to work out at around £5m per coach but since we have no idea of the precise number of trains and whether they will be electric or diesel, or of how much maintenance for a 30 year period will cost, it is absolutely impossible to work out whether this is a good deal or not.

Take, too, the issue of risk, barely mentioned at the press conference or the coverage. The whole idea of this deal is that the ridiculous named ‘Agility Trains’ will provide power by the hour on the various lines where these trains will be used. All the risk of manufacture, maintenance and availability will supposedly lie with the private sector suppliers. But these deals never work out like that, as the PPP for the London Underground all too obviously demonstrate. Moreover, any accountability is lost in the complexity and in the fact that once a preferred bidder is chosen, the successful team has the Department for Transport by the balls.

Take the question of how much of this train will be built in the UK. On pressing, the man from Agility admitted that one third of the work would be in Japan, one third in the UK and the rest in the world wide supply chain, some of which would be in the UK.  God knows where

Just think of all the things that can go wrong: this is a completely new train, with revolutionary ideas such as a diesel engine to boost power and to act as a back up, and costs could clearly soar. The risk of that will have been taken into account by the bidders and added to the cost, which will make this a very expensive deal.

Apparently, the losing bidder, the Siemens/Bombardier team, was asked to retender and managed to knock off 20 per cent off the cost and they still lost!

Why can’t we just buy off the shelf – modified for British conditions – trains with conventional contracts rather than trying to build in all the costs and risks into one massive complex deal that is bound to go wrong and that will result in a feeding frenzy for m’learned friends.

I wish I could be more positive about a deal that ultimately will probably deliver some wonderful trains which I might just be young enough to travel on before my dotage but there are more holes in this story than in a woodworm infested church roof – I’m sure you can spot others.

  • Parkey

    Here’s a good question. If the DfT is going ahead and buying new diesel trains, with a lifespan of about 30 years, what does that mean for electrification?

    Also, would anyone care to guess at the cost of a litre of diesel in 2045?

  • Dan

    Good to see you start on this one Christian – I was amazed the press bought the ‘buy British’ story hook line and sinker for at least a day – The moment I woke up and heard it was not Bombardier I knew it was not going to be UK built (or only limited UK build). Of course dull old BR could manage to design a decent carriage, build it in the UK, build diesel locos and string them together – holds the line for nearly 40 years (don’t forget Mrs T’s govt cancelled the last of the 125 orders designed for cross country too).

    What’s the betting this will IEP will still manage to have cramped seats, no luggage space, no bike space, seats with no windows and quite probably smelly toilets – despite the complexity of the contracts negotiated!

  • Tony

    …or we could always have an additional run of Peppercorn A1s, built behind Morrison’s in Darlington. Makes a much sense as the hybrid monster. This whole concept is complete bollocks.

  • Michael Weinberg

    I wonder why the next tranch of TGV’s dont include on board diesel engines to help them get up the hills!?
    Also nothing has been said about the ‘donkey’ diesel engines to move the trains around in depots so they dont have to electrfy them.
    What happens when the donkey engine wont start or goes wrong. The whole train wont be able to move so they’l have to keep conventional diesels on hand to shift stuck trains.

    The whole design is barmy and just what you’d expect from our DfT trying to do yet another job it hasn’t the skills for.

  • Yes I agree. I posted a blog on my site mainly in connection with the jobs issue. I have heard much the same relative to the tech specs being unworkable. My understanding is that Bombardier could not provide the technical solution required against badly written specs and their capacity to build the trains was also an issue.

  • Scott Dixon

    I agree with Howard about the jobs – my observation is that despite the recession, engineers are in short supply – chronic shortages of suitably qualified people still exist in the offshore oil/gas industries, defence and power generation – all of which are paying a lot more than the going rate to get people through the door. So where are the people going to come from with the requisite experience to develop, test, and commission these new trains? More and more of the old BR hands have either left the industry altogether or retired.

    As far as recruiting technical people is concerned, the railway is already fighting for the scraps as it is (even though in my opinion, Network Rail and several others aren’t making it easy for themselves with some of the recruitment policies I’ve came up against).

  • Jon Porter

    Bombardier, French/Canadian Company, main works in Bruges , Siemens, German company, works split between Germany and Austria. What on Earth makes people think this consortium were going to be an all British effort. Going by their previous offerings Derby would probably do little more than marrying bogies with bodyshells or fitting the interior and testing. Hitachi will also be some welcome competition within a restricted market, currently operators are not spoilt for choice or price, and quality can be an issue!

  • Peter

    Jon makes a good point about where the Bombardier / Siemns train would actually have been manufactured. Still, Bombardier have a healthy order book with loads of LUL stock for a number of years, plus hopefully they’ll get the 200+ “fast track” DMU order that the DfT may decide on within the next decade or so!

  • Robert Harris

    Why don’t they simply refurbish the existing train sets, given that the advantages of the new ones in terms of speed and efficiency are at best marginal?

  • RapidAssistant

    Thing is Robert, most of the fleet already HAS been refurbished – the final HSTs are being re-engined and the coaches getting (much to the detriment of the original BREL design) new seats and interiors for the first time in their 30 year life. Clearly there is a limit to how many times you can keep on giving 1970s vintage rolling stock another stay of execution.

    You could argue that the problem is not one of the interior fixtures and fittings, or even reliability so much as capacity. We’re seeing nearly all of the stored Mark 3 fleet being brought back into service either as additional hauled services or to make “new” HST sets by converting the old loco hauled West Coast vehicles – like Grand Central had to do. There just isn’t enough trains of a suitable enough quality to satisfy demand on certain routes.

  • Jed Bland

    Clearly the issue of British jobs is somewhat irrelevant since, though most of the work is likely to be done in Japan, under Bombardier it would probably have been in Belgium, since their Derby works is fully committed.

    What exercises me is that the coaches have been specified as nine feet longer than the present
    British maximum. Surely this will bring in all sorts of structure gauging issues. What about the curved platforms at stations like York?.

    Does it mean taxpayers are likely to find themselves lumbered with a large and unexpected bill?

    I am told that this is because it is the European standard. It isn’t because of production difficulties
    since Bombardier, Siemens et al are quite used to producing trains for us of conventional UK length. Why are we messing about being sidetracked in this way when so much money is needed for other important railway improvements to be done?

  • Mike Smales

    Just finished ‘Fire and Steam’. Absolutely fascinating. Read it in 3 days. Could not put the book down. When I bought it I was expecting a heavy but interesting history book … far from it. It was superbly written and flowed beautifully. Gave a fascinating insight into how the railways were built, the political involvement both good and bad and the massive input they have had into everybodies life in this country.

    I would suggest that anyone interested in the history of Britain’s railways gets along to their local bookshop and buys one…. absolutely brilliant. !!!!

  • David the One

    9,000 jobs in Japan, 734 in Britain. Britain is BUILDING no trains whatsoever, they are going to re-assemble trains built in Japan.
    The other issue that exercises me, the fact that Japan operates closed borders for competition on its’ own railways, is never taken into account. Reciprocity must be applied on all contracts and deals. Obhama signed a deal with Japan to increase the import percentage of American rice into Japan, yet even as the delegation left Japan the Yanks were admitting it was a no-go deal and would be broken straight-away by Japan. They did the same to the EU over car imports back in 1992. EU wanted an increase of 4.62% of European made cars for imports into Japan, and the deal was signed. EU delegation returned home happy, only to find out that the same Japanese department they were dealing with had been in contact with every Japanese company that produced cars in EU, and filled the entire 4.62% with Japanese brands!!!
    We are constantly betrayed by the simpletons in Westminster and Whitehall.

  • David the One

    And yet, we could had new compatible trains sooner, of a higher technological standard and of a type that fitted our out-dated infrastructure by going straight to Vosloh, Alstom, Seimans, even Bombardier. That is NEVER aired.

  • David the One

    And now a further insult to us by Japan, Hitachi, Westminster, Whitehall and AGWR, with the AT300 being built entirely in Japan. And we wonder why we are dipping into recession?

  • David the One

    Jon, why not just carry out a TINY bit of research into the closed market that is Japan. They allow NO competition from gaijing, (foreigners) on their railways.
    Never separate Socio/Economic/Politics into different categories.