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New Thameslink train contest would threaten more jobs, claims Hammond

Transport secretary criticises campaign to re-run bidding process

Derby train-maker Bombardier could be thrown a lifeline over the £1.4bn Thameslink trains contract if ministers launched a new bidding contest, the government has admitted, but this “nuclear option” would threaten jobs elsewhere and hold up vital improvement work on the rail network.

Philip Hammond, the transport secretary, told MPs that the Department for Transport had the legal right to scrap a controversial process that saw Siemens of Germany installed as preferred bidder for 1,200 carriages.

Bombardier announced plans to cut more than 1,400 jobs following the decision, prompting a political row that saw Hammond and the two rival companies called before the transport select committee on Wednesday.

“There is a nuclear option and it is absolutely true that the secretary of state has the ability to abort and look afresh at the Thameslink project,” said Hammond. “But the consequences would be very significant.” He pointed to plans to electrify large parts of the UK train network that would use trains made available by the new Thameslink carriages.

A senior Brussels official confirmed that Hammond could scrap the Thameslink process and start again, though it would probably have to pay compensation to Siemens. “If the secretary of state says ‘I want to start again’ and remains within the law while doing that, then we have nothing to say,” said Jonathan Faull, director general for internal market and services at the European commission.

Derby council’s Conservative leader, Philip Hickson, has tabled a joint motion with his Labour party counterpart criticising David Cameron for the “fundamentally flawed and perverse” move to back Siemens over Bombardier. The motion also commits the council to work with the Unite trade union to fight the decision.

Speaking on BBC Radio 4, Hickson said the government’s response had been “pitiful”. He added: “I do not think they have grasped the widespread anger in the city and in the country as a whole that this is the last train manufacturing company in the country and that if it goes, as it may well do if they do not revisit this decision, in the future every train, every tram, every underground train will have to be imported. That can’t be right.”

Bombardier told the committee hearing that the government’s emphasis on financial strength as a factor in the bidding process tilted the contest in favour of Siemens, which has a stronger credit rating than its Canadian rival.

Colin Walton, chairman of Bombardier Transportation UK, said the company had put forward a “cutting-edge project” but the government had been swayed more by financing than by the quality of the trains on offer. Hammond and Siemens denied this. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds