Thameslink Trains Delayed Again

German manufacturer Siemens has revealed that the signing off for the £1.4 billion trains contract for Thameslink may be pushed to the autumn. The company is still finalising one of the most controversial procurement deals by the government in recent years. The manufacturer had previously been due to sign off on the deal early this year, but this was delayed until the summer. This follows reports last year that the company was having a hard time finalising agreements with banks for funding.

The fact that the UK government awarded Siemens with the contract to build 1,200 train carriages for Thameslink was controversial in itself. The manufacturer was chosen as the preferred bidder for the London commuter route last year. This meant that the Bombardier plant in Derby was pushed to the side, putting the future of the nation’s oldest factory for trains into question. MPs and trade unions had called for the government to move Bombardier up to preferred bidder for Thameslink, but there was no give. Since the decision, the company has had to cut over 1,000 staff and the future of 1,600 others depends on the £1 billion contract being awarded for Crossrail trains in London.

The Thameslink contract is a private funding investment, with the consortium which owns Siemens raising debt to finance the construction of train cars at the company’s plant in Krefeld, which is near Dusseldorf. Equity has been invested in the project, but most of the financing has come from debt. The trains will be leased to the route operator for Thameslink, and the regular fee they pay to the consortium will be used to pay off the equity and debt.

Siemens is near completion of the commercial contracts, which support the order. The contracts set obligations for performance, grounds for termination and compensation payments. Then the project will move on to completing financing contracts. These have to be approved by the finance committees of individual banks.

The company’s head of the UK train division, Steve Scrimshaw, had planned to close the Thameslink contract by this summer, but now says signing off the financial and commercial contracts will be moved to after August. He says they are making good progress on the project, but there are many contractual issues that have to be ironed out. They have a relatively strong group of banks and are confident of securing financial closure by the end of the summer or early autumn. He added that they started construction work on the trains for Desiro City and are aiming to begin testing vehicles in Germany this autumn.

A spokesman for the Department for Transport (DfT) says that the government, Siemens and the company’s consortium are making progress with the contracts. They expect the contracts to be signed off by early autumn. Both parties have also denied rumours that the contracts will default if they aren’t signed off by this month. However, the government body won’t discuss any part of the deal, saying it would breach commercial confidentiality.

Meanwhile, Rail, Maritime and Transport (RMT) union general secretary Bomb Crow has slammed the government for the way they have handled the Thameslink contract. He says that the fact that over one year has passed since the contract was awarded puts the nail in the coffin on all the government’s lies about it being too late to give the contract to Bombardier. Plain incompetence has meant thousands of jobs are left at risk, along with the future of British train building.

Crow added that, for Siemens to make this delay out to be contractual issues is just a kick in the gut for UK manufacturing – specifically Bombardier’s train builders. It’s time for this industrial vandalism to end, and the union demands that the whole Thameslink scandal come to an end. They also want the deal to be cancelled with Siemens and awarded to Bombardier, where the capacity and skills at the Derby plant can deliver the trains without being caught up in the financial crisis across the Eurozone.