Siemens’ £1.4bn Thameslink trains contract close to being signed

Union urges government to favour Bombardier and British jobs as German firm brushes aside finance doubts

Siemens expects to finalise the £1.4bn Thameslink trains contract this summer, amid renewed calls to halt the process and award the deal to the Bombardier plant in Derby.

On the first anniversary of the controversial decision to give a large procurement contract to a German manufacturer, Siemens said the agreement was close to being signed. The trains will be built at the company’s Krefeld plant near Düsseldorf, which has led to calls by trade unions for government-backed manufacturing contracts to go to British businesses in the future.

The head of Siemens’ UK train division, Steve Scrimshaw, said: “It is not unusual that the negotiation for such complex projects take some time to achieve contract closure. One year on from being named preferred bidder we are making excellent progress and, despite challenging economic conditions, we anticipate financial closure of this important deal over the summer.”

Reports have suggested the eurozone crisis has created headwinds against Siemens securing debt financing for the contract.

Bombardier has cut 1,200 jobs at Britain’s last remaining train factory since June last year, when the Thameslink decision was announced. It is now focusing on the next big government train contract, for the Crossrail project, which is worth £1bn. Bombardier has said the Crossrail contract is key to keeping the Derby site open and preserving its remaining 1,600 jobs. However, European Union procurement rules prohibit states from showing bias towards homegrown businesses when awarding contracts.

Scrimshaw has warned that any bias against non-UK bidders in the Crossrail process will have damaging consequences for British business. Nonetheless, in an effort to raise the chances of UK bidders, the tender document requires bidders to outline how their offers will benefit the UK economy.

Last week the RMT union claimed that the government should capitalise on the Thameslink delay by handing the contract to the runner-up, Bombardier. Bob Crow, the RMT’s general secretary, said: “On the first anniversary of this act of industrial vandalism RMT is demanding an end to the whole long, drawn-out Thameslink fleet scandal and a cancellation of the failed Siemens deal in favour of Bombardier in Derby, where the skills and capacity to deliver these trains isn’t bound up with the eurozone financial crisis.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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