HS2 high-speed rail link ‘white elephant’ MP claims

From: BBC News

A proposed £32bn national high-speed rail link was described as a “white elephant” during an MPs’ debate.

Conservative MP Andrea Leadsom made the claim adding that HS2 was “out of date before it is even completed”.

Liberal Democrat Dr Julian Huppert said the project was “a cold, hard necessity which we cannot afford to ignore”.

The line would first connect London to Birmingham, then to Manchester and Leeds and include stops in the East Midlands and South Yorkshire.

Ms Leadsom, whose South Northamptonshire constituency would be affected by the line, said she was against plans for a scheme that she thought was “unjustifiable and eye-wateringly expensive”.

“If this route was going from Truro to Paddington or from Leeds to Edinburgh, I would still be here today defending the taxpayer,” she added.

Coventry North-West MP Geoffrey Robinson (Labour) was also opposed to plans and said: “It’s the largest capital project this country will ever have engaged in and it is money, frankly, that could better be spent elsewhere.”

Successful economy

Transport Minister Theresa Villiers backed HS2 to defuse the “passenger capacity time bomb” on the West Coast Main Line and denied the scheme was only about cutting the London to Birmingham journey time to 49 minutes.

“It’s about delivering the inter-city transport links that are absolutely crucial for the future success of our economy.”

Labour’s shadow rail minister John Woodcock argued HS2 was “a vital lifeline of economic growth”.

“We will be failing future generations if we pass up the opportunity to employ the most advanced technology available,” said the Barrow MP.

A petition against the scheme has been delivered to Downing Street with 108,000 signatures.

Stop HS2 campaigners assembled at Old Palace Yard, opposite the House of Commons, to protest against the plans.

The line would also run through rural parts of Buckinghamshire, Oxfordshire, Northamptonshire, Warwickshire and Staffordshire.

ATOC responds to Labour’s claim they are “ripping people off”

Responding to Ed Miliband’s claim that train companies are “ripping people off”, Michael Roberts, Chief Executive of the Association of Train Operating Companies, said:

“Ed Miliband is at best suffering from amnesia or at worst displaying rank hypocrisy. Train companies are subject to rules laid down by the Department for Transport, rules that were created and rigorously implemented by successive Labour Transport Secretaries. It was also his party in government that switched from annual below to annual above-inflation fares rises in 2004 to reduce taxpayer subsidies to the railways.

“At a time when Britain needs the private sector more than ever to boost economic growth, this unsubstantiated slur seems to confirm an anti-business bias at the very top of the Labour party and is a unwarranted insult to the tens of thousands of people who work on the railways day in and day out to help keep the country moving.”

Government ‘should give up its control’ of £1bn Crossrail deal

From: Derby Telegraph

Labour MPs last night called for the Government to hand over control of plans to buy £1 billion worth of trains to another organisation.

Shadow Transport Secretary Maria Eagle made the demand while giving her speech to her party’s annual conference in Liverpool.

She argued that the Government had shown it could not be trusted to ensure British firms – like Derby trainmaker Bombardier – had a fair chance of winning state contracts.

Her comments came a day after Labour gave an award to campaigners from Derby, who are fighting to get the Government to change its decision to hand a £1.4 billion Thameslink contract to German firm Siemens, instead of Bombardier.

After the move was taken, the Litchurch Lane firm announced it would review its UK operations, raising the prospect of 1,400 job losses.

Now the Government is drawing up plans for its next big train order, Crossrail, valued at about £1 billion.

Ms Eagle told conference delegates: “I say to (Transport Secretary) Philip Hammond – there is no faith that your department will give British manufacturing a fair chance. So hand over responsibility for ordering the new Crossrail trains to Transport for London, which – thanks to Labour – has a track record of buying British.”

Ms Eagle pointed out that Prime Minister David Cameron had promised to support business when he took his Cabinet to Derby, shortly before naming Siemens as the preferred bidder for Thameslink.

Ministers have consistently said the way the tender for Thameslink was designed by the previous Labour administration meant they could only have given the contract to Siemens. They claim it would have been breaking EU law to do otherwise.

Ms Eagle called that “a lie” and said the Government could have scrapped the tender process and started again with one that gave the Derby firm a better chance of winning. She urged campaigners to keep fighting to get the Government to change its mind.

Last night ministers were defiant. Mr Hammond warned the consequences of further delaying Thameslink would be too severe for taxpayers to bear and said: “The project is already 16 years behind schedule – in its original iteration it was known as Thameslink 2000. It has already had very large amounts of capital investment sunk into it,” he said.

He argued that 3,000 construction jobs depending on the project moving forward could be put at risk if it was delayed.

On the Crossrail issue, a Government spokesman pointed out that it was Labour that had set up Crossrail Ltd – an arms-length body – to deliver the scheme, overseen by the Government and Transport for London. He said: “Is Labour seriously saying taxpayers in the rest of the country, outside London, should have no control over the billions of pounds they are putting into Crossrail?”

————————————————————————————————————————————–

It really beggars belief what Labour will do these days. Not only did they ‘make TfL buy British’, but they also award the people protesting about a loss of work in Derby, that the party’s own ineptitude in developing the procurement process caused in the first place.

Maria Eagle would of course have backed the Government if they had scrapped the procurement process to give Bombardier a chance.  Thus costing millions more pounds of taxpayers money to be wasted.

The above article also once again fails to mention that Bombardier were already considering up to 1200 job losses regardless of the Thameslink deal.  In the modern world, and including the findings of the McNulty report, rolling stock procurement MUST give serious value for money and not just be awarded on the basis of where the companies are based.  Let us not forget that even Bombardier is not a British company, they are Canadian.

Railways have become a ‘rich man’s toy’

From: Evening Standard

Railways have become a ‘rich man’s toy’ but factory workers will still feel the benefits of a new high-speed link even if they do not get to use it, the Transport Secretary said.

Philip Hammond said action was needed to bring down some “eye-wateringly expensive” fares so that the whole network became more accessible to people on lower incomes.

It was unlikely that the socio-economic make-up of passengers would be much different on the new HS2 line between London and Birmingham than the West Coast Mainline, he told MPs.

WCML Ticket Prices Range from eye-wateringly expensive to really quite reasonable

However the massive investment would not only benefit passengers who enjoyed the faster journey times, he insisted as he gave evidence to the Commons Transport Committee.
“If you are working in a factory in Manchester you might never get on HS2 but you would certainly be benefiting from it if the sales director from your company is routinely hopping on it to jet round the world from Heathrow in a way that brings in orders that keep you employed,” he said.

One study suggested average incomes in Birmingham could rise by £300 as a result of the link, he said. It is hoped that the high-speed line will be extended to other cities such as Manchester.

His comments came in response to questions about whether HS2 would be made affordable.

“Uncomfortable fact number one is that the railway is already relatively a rich man’s toy.
“People who use the railway on average have significantly higher incomes than the population as a whole – simple fact,” he said.

He added: “The assumptions underlying the patterns of use of HS2 assume similar pricing to the West Coast Mainline, which I have said before ranges from eye-wateringly expensive to really quite reasonable, if you dig around and use the advance purchase ticket options that are available.

“And therefore the assumption is that the socio-economic mix of passengers will be broadly similar to those using the West Coast Mainline.”

Mr Hammond tried to play down the significance of his “rich man’s toy” comment after the hearing, insisting he had simply stated a fact about rail users and denying blaming high fares.

But he came under fire from Labour and train user groups who pointed the finger at his decision to allow fares to rise an average eight per cent next year for pricing some people off the network.

Commuters reacted with horror last month when the Government changed the formula for calculating increases, allowing the higher than expected hikes.

Speaking to the BBC, Mr Hammond said: “Is the railway expensive? Yes it is. Is that because we have too high costs in our railways? Yes it is.

“The Government is determined that, with the rail companies and Network Rail, we will tackle excessive costs… so it becomes more affordable for taxpayers and fare payers alike.”

From next year rises to regulated rail fares, which include season and saver tickets, will be calculated by adding three per cent to the headline retail prices index (RPI) rate of inflation for July. Previously it was RPI plus one per cent.

But the eight per cent rise can be taken by train companies as an average, meaning passengers could face even higher increases in their commuting costs.

At the time, Mr Hammond said raising fares was “a difficult decision” but extra money was needed to guarantee improvements which could ensure the railways were better value for money in future.

But shadow transport secretary Maria Eagle said the Government was “totally out of touch with the cost of living crisis facing commuters” and failed to understand how “eye-watering rail fare rises” would add to the burden on families.

Stephen Joseph, chief executive of the Campaign for Better Transport said: “Philip Hammond’s description of rail fares as ‘eye-watering’ must lead the minister to reconsider the steep fare rises currently planned by Government.

“Far from being simply ‘a rich man’s toy’ trains are also vital for many of those on more moderate incomes who need to get to work, and the Government will price many off the railways if it carries on with its plan to increases rail fares at three per cent above inflation over the next few years.

“Instead, the Transport Secretary’s promised fare review must deliver simpler, fairer and affordable rail fares.”

A spokesman for the Association of Train Operating Companies said it catered for passengers “from all backgrounds who travel on a range of different tickets.

“The average price paid for a single journey comes in at around five pounds and the sale of cheap advance tickets has doubled in the last few years, with almost a million sold every week.

“The Secretary of State is right to point out that the benefits of rail are felt well beyond the people who travel by train. The nation’s railways support jobs and businesses and play a key role in the British economy.”

Heathrow £500m rail link plan consideration

From: BBC News

UK Transport Secretary Philip Hammond is said to be drawing up plans for a £500m rail scheme linking Wales with Heathrow Airport.

A proposed new spur from the Great Western main line would end the need for passengers to travel in to London before heading out to the airport.

The scheme, to include the west of England, would also connect with the proposed HS2 high speed rail link.

The Department for Transport estimated it could cut 30 minutes off journeys.

The Sunday Times newpaper reported Mr Hammond was considering building a new railway station at Heathrow that would see up to four shuttle services per hour from Reading.

The new airport railway station would also take trains direct from Cardiff and Bristol, it said.

It would also be a hub for the High Speed Two (HS2) rail link, it added.

The Department of Transport has declined to comment but Whitehall sources said the plan would:

• Cut journey times by 30 minutes
• Fit in with the proposals for the high speed rail network – subject to consultation – and if it goes ahead it will be an intergrated transport hub at Heathrow
• Allow rail travellers from Wales to pick up the high-speed line for journeys to the midlands, the north and Scotland.

The UK coalition government had confirmed that a £1bn electrification of the main rail line between London and Cardiff, announced by the previous Labour government in 2009, is to go ahead.

The Welsh Government has called for the full electrification of the line to Swansea.

Tony Miles, who writes for Modern Railways magazine, told Radio Wales the scheme would involve creating about five miles of new railway as well as amending some existing facilities.

He said: “It wouldn’t be a through service from Cardiff and Swansea and so on. I think that would be fairly impractical.

“What I gather from proposals that have been talked about by business leaders is to have a shuttle service of some sort that picks up at Reading and goes straight in to terminal five.

“A lot of people are problaby getting off at Reading and getting the bus at the moment, which is a much more inconvenient way of doing it, pariculary if you have a lot of luggage.”

The proposed new airport link would not be possible until after the electrification of the south Wales mainline, he said.

The Sunday Times reported the Department of Transport as believing the link and airport transport hub could be open by 2021.

Bombardier ‘had little chance’ on Thameslink because of contract terms

From: Daily Telegraph

Bombardier had virtually no chance of winning the controversial £1.5bn contract for Thameslink trains because of its relatively higher financing costs, senior Government sources have disclosed.

The Canadian train maker, which on Tuesday axed 1,400 jobs at its Derby plant, was at a competitive disadvantage worth hundreds of millions of pounds because of the way the previous Labour government structured the contract.

The tender called for bidders to build, maintain and, crucially, finance 1,200 new carriages over 30 years for the London commuter service.

Bombardier Class 377 EMU in service with Southern

The financing element gave Siemens of Germany a big advantage over the three other bidders because of its higher credit rating – one vastly superior to Bombardier’s, which is below investment grade.

Siemens’ debt is rated A+ by credit rating agency Standard & Poor’s – six notches above Bombardier’s BB+. The other two bidders, Alstom and Hitachi, are respectively rated BBB and BBB+.

Investment bankers familiar with deals similar to Thameslink trains said that each notch of difference equated to at least 0.25 of a percentage point on any debt-funded deal.

That would leave Bombardier having to pay extra interest of at least 1.5pc a year to finance the deal. Over a 30-year contract that could amount to £700m.

“The way the contract was structured, it wasn’t just about building the trains but financing them,” said the source. “On that basis it was very hard to compete with Siemens.”

A summary of the tender, dated April 2008, states: “The Department [for Transport] intends that the chosen bidder will be required to arrange the finance necessary for the acquisition and ownership of the rolling stock.”

That effectively turned the winning bidder into a rolling stock leasing company, where cost of finance is crucial.

Bombardier, which remains reserve bidder on the Thameslink contract, is yet to be told by the Government why it lost the bid. A company spokesman declined to comment.

So it seems that once again Labour have screwed up and the Conservatives are taking the blame.  There is no denial that the Labour Government set up the contracting process and it has been left for the Conservatives to deal with the mess.  How many more deals will go up in smoke due to this incompetence?  Only time will tell.

Bombardier to announce ‘substantial’ job losses

From: Guardian.co.uk

Fears 1,500 jobs at risk at Derby train factory after company loses £3bn Thameslink contract to Siemens of Germany

Bombardier, the Canadian engineering group, will announce major job losses at its Derby train factory on Tuesday, amid fears that 1,500 workers are at risk after the business lost a £3bn government contract to a European rival.

The company told trade union officials to expect “substantial” redundancies. Significant reductions appear to be inevitable after Bombardier warned the government privately in May that 1,200 posts were already at risk among the 3,000-strong workforce. It is thought that up to 350 more engineering jobs are under threat.

In a blow to the government’s plans for Britain to manufacture its way out of recession, Bombardier has placed its UK operations under review after the Department for Transport awarded a contract to make carriages on London’s Thameslink rail route to Siemens of Germany, bypassing Britain’s last remaining train factory.

In a recent letter to the transport secretary, Philip Hammond, Bombardier warned that 1,200 jobs could be at risk at Derby even if it won the Thameslink contract. However, it had hoped that winning a deal for more than 1,000 carriages on the rail route would allow the company to retain many of the jobs. If it lost the Thameslink deal, it said, more jobs could go by the end of the year, amid doubts over the 350-strong engineering unit.

It is understood that about 700 agency workers employed at Derby are most at risk, with the heaviest cuts expected to come from manufacturing staff. In a letter to David Cameron, Labour has claimed that up to 20,000 jobs could be hit by the Thameslink decision and looming cuts at Bombardier. Bombardier’s manufacturing lines will grind to a halt in 2014 when it finishes a contract for London Underground trains. Future orders for the as-yet unbuilt Crossrail and High Speed Two projects are years from being tendered.

Unite has written to two cabinet ministers in an effort to have the Thameslink decision reversed. Diana Holland, assistant general secretary of the UK’s largest trade union, said the move could be the “last straw” for Bombardier in the UK.

The RMT trade union, which also represents workers at Derby, said the effect of the Siemens decision would be “devastating.” Bob Crow, RMT general secretary, said: “This act of political sabotage to a key element of the remaining UK manufacturing base could leave the nation that gave the world the railways building nothing but a few basic components.”

The government believes its hands were tied over the Thameslink decision by European Union procurement rules, which state that any EU state must not allow a company’s location or nationality to influence contract awards. Nonetheless, Unite has pointed out that Germany’s state-owned rail operator, Deutsche Bahn, recently handed a €6bn (£5.4bn) high-speed train contract to Siemens.

Siemens, which employs 16,000 people in the UK, claims the contract will create up to 2,000 jobs in the UK supply chain. However, even though some components will be made in the UK the trains will be built in Germany.

I have highlighted some parts of this report that I believe need to be commented on.

There have been several reports in the media that Bombardier are being forced to cut jobs due to the loss of the Thameslink contract but, apparently in a letter to Philip Hammond, they were already considering the job losses EVEN IF they secured the contract.  This is completely at odds to what has already been reported.

Labour are claiming that 20,000 jobs will be hit by the decision.  Where exactly are the facts backing up those figures?  Siemens have already stated that some components for the fleet will be manufactured in the UK so I don’t see the jobs being lost in the supply chain and as Bombardier are looking to cut up to 15oo jobs, this leaves the Labour figures 18500 jobs short.

As usual, a gold plated opportunity arises and Bob Crow just has to put the boot in by claiming that the award to Siemens was “Political Sabotage”.  The European Union rules on Procurement basically state that contracts should not be awarded based on a company’s location or nationality so, by playing by the rules, the Government are wrong.  Perhaps Mr Crow should look at the figures used to decide on the best value for money and see how much the labour costs involved are.  I won’t place a bet that the German figure was cheaper.

 

Review to be published into government’s £32bn HS2 plan

From BBC News.

An independent review of the £32bn HS2 London to Birmingham high-speed rail project is to published.

The House of Commons transport committee announced it had asked a consultancy firm to look into the business case for the scheme.

The review will be published on Tuesday, when the committee holds the first of five evidence sessions on HS2.

The first phase of HS2, from London to Birmingham, is due to be open in 2026, with extensions further north later.

A Y-shaped section taking branches to Manchester, Leeds and possibly further north could be finished by 2033.

The chairman of the committee, Labour MP Louise Ellman, said: “The review is a guide for us. We felt we needed it. This is a project of great importance and also of great controversy.”

HS2 is a central facet of the coalition government’s transport policy and was touted as an alternative to the third runway at Heathrow when the government scrapped it following last year’s election.

The review looked at the overall business case rather than the details of the route, which passes through several beauty spots as well as a large swathe of suburbs in north-west London.

A total of 190 organisations have submitted evidence to the committee but Transport Secretary Philip Hammond is not expected to answer questions until 13 September.