Rail contract tender in disarray as Alstom pulls out
Financial Times: April 14 2008
By Robert Wright, Transport Correspondent
Plans for one of the most important new train orders are in disarray after a bidder for the Intercity Express programme dropped out and the two remaining contenders demanded more time to submit tenders.
The withdrawal of a consortium of Alstom Transport and Barclays Private Equity from bidding to supply the order for between 500 and 2,000 carriages has heightened rail industry concerns about civil servants' specifications for the high-speed trains.
The Express Rail Alliance - a consortium including Canada's Bombardier and Germany's Siemens - and Japan's Hitachi have successfully asked for the postponement from May 7 to June 30 of the deadline to submit bids.
Both are thought to be struggling to make sense of the requirements for the trains, for which they are supposed to produce at least three basic designs and many further permutations of train lengths and layouts.
The Inter City Express trains are due to replace InterCity 125 trains that have been the workhorse for 30 years of the Great Western, Midland and East Coast main lines, as well as some other ageing trains.
The Department for Transport, rather than train operators and leasing companies, is running the ordering process to ensure all the trains use similar, interchangeable designs.
Rail industry executives have told the Financial Times neither the financial aspects of the programme nor the demands of the specification are workable.
There is particular criticism of the demand for one version of the train - which is meant to be lighter than traditional vehicles - to be able either to run off overhead electric lines or to use a diesel engine. Each such hybrid train will need two sets of traction equipment, of which one will always be out of use.
"They've asked for an environmentally friendly, lightweight train but they want a hybrid that then carries a lot of diesel around under the wires," one executive said.
Another executive said it was "extremely complex" trying to submit a sensible bid for the work because the trains were now meant to use so many routes. The project was "fundamentally flawed", a third said.
The Department for Transport has barred shortlisted bidders and others involved from speaking publicly.
Alstom said its consortium withdrew after reading the full specification. "It was decided to withdraw from the competition and instead focus on other major opportunities in the UK rail market," Alstom said.
The department confirmed it had granted an extension for submitting final bids. It expected this to have no effect on the date the trains enter service - 2012 for a pilot batch and 2015 for the main production run.
Depending on how many trains the Department for Transport eventually orders and the length of the associated maintenance contracts, orders under the programme are likely to be worth several billion pounds.