Assembling trains in the UK

[daikilo]

There is much discussion elsewhere about who is "responsible" for the Bombardier announcement re potential job cuts at Derby Litchurch Lane.

It seems to me that UK procurement may be going beyond what European rules require for fair competition. I can see no reason why a minor issue such as assembly in the UK (or even more local elements) is prohibited.

One key issue is that Litchurch Lane is now seen as Bombardier. In the past, a solution whereby they made a competitive bid to say assemble or more a unit from another supplier would have been manageable within European rules and probably still is.

The issue here is that such an approach would probably have to be open to competitive tender to all suitable UK facilities, and I await to see the list of bidders, given who has or is currently rebuilding UK coaching stock.

 

[island]

Well, the French and Germans manage to get around all the EU procurement rules when it suits...

 

[BestWestern]

This is an incredible blunder by the government, and one which I hope comes back around to bite them in the future. Not content with the McNumpty jokebook and it's proposals to lay off thousands of railway staff, we now can't even build our own trains in this country either :roll: At a time when we desperately need to take every opportunity to help revive our economy, this beggars belief.

As for the damned EU and it's unwanted, unwelcome rules, no other EU member seems to be so sickenly obsessed with doggedly following it all to the letter, with a complete disregard for any negative effects on the nation. The sooner we get the hell out of it all, the better.

 

[thefab444]

You could argue that the government are trying to make a political point by following the rules to the letter and are trying to build up anti-EU feeling.

Or maybe the Bombardier bid was just crap?

 

[tbtc]

Well, the French and Germans manage to get around all the EU procurement rules when it suits...

As I understand it, French trains are being built with Scunthorpe steel. It works both ways...

 

[BestWestern]

You could argue that the government are trying to make a political point by following the rules to the letter and are trying to build up anti-EU feeling.

Or maybe the Bombardier bid was just crap?

Well, that's one possibility I suppose, though political suicide comes to mind! Although there were utterings about Siemens having a 'better value' bid, I would doubt that Bombardier would be daft enough to completely flunk it with a naff bid, particularly as they were only building the Southern/FCC Electrostars fairly recently. Bad move on the part of the Government I'd say.

 

[jon0844]

I read one comment that suggested Bombardier didn't want the contract as they were already seeking an exit from the UK. If they were going to lay off 1,200 workers anyway, by their own admission, I fail to see why them winning would have been considered a good thing anyway!

Did we know for a 100% fact that if they had won, they wouldn't have made the trains somewhere else anyway? Would it have been a requirement to agree the finer details of production in the tender, or would it have been accepted that they simply had to build and deliver the trains on a certain date, at a certain price?

What disappoints me is how many places are now turning this into a blatant anti-EU attack. Only today I read on the BBC a comment about the SCANDAL of giving work to a German company. So, not only is it anti-EU but anti-Germany. The point about Bombardier not being a British company seems to be ignored over and over again.

Now as long as there were no bungs or any other corruption in the decision making, I really do not see what the problem is. The skilled workers could go and work for Siemens, while those who were on contracts always knew they would end. That's what contract work is all about (and it's generally very well paid too).

We do need to see the bids to be able to make our own judgement, but if Bombardier did price itself out of the market for whatever reason (like closing the plant and selling off the land for housing) then I wonder if people will retract their extremely strong opinions and attacks?

What gets me is why Bombardier weren't going for refurb work! That has to be where the bulk of the money will be in the next 10 years or so.

 

[Metrailway]

You can't blame the current coalition government for the decision. The procurement was set out by the last Labour government, which went further than EU rules, and thus today's Government was bound to follow the criteria set out by that procurement and choose Siemens over Bombardier

 

[Oswyntail]

....Or maybe the Bombardier bid was just crap?

There are essentially three elements to a bid (whatever you are looking at):

• compliance to the tender document - it is highly likely that both bids were fully compliant, otherwise one bid would have been ruled out at an early stage, Part of the tender would have been a requirement to provide references, so previous good or bad experiences with a particular supplier would have been assessed as part of that
• "value added" - those bits that were not specified in the tender, but are thrown in to add weight. Things such as dedicated technical support, training support. Almost inevitably, this is the area in which bids are won or lost. Equally, because they are extra to specification, there may be no direct comparison between bids.
• price - this, of course, includes the "value added", which is why, in some cases, the more expensive option can win. For instance, the provision of training simulation can add 1% to the overall contract price, but save more than that in other training costs.

The most difficult part of bid evaluation is the assessment of "value added", trying to assess the value of "go faster stripes" against "air horns". In my experience (in IT procurement) the evaluation team would approach each party to find if they could match the "value added" and at what cost. British employment may well have been included in this, but found to be not the most critical extra - assuming it was not part of the original tender document.
Remember, a decision had to be made. The Bombardier bid may well have been excellent - just not excellent enough.

...
We do need to see the bids to be able to make our own judgement....

And that is the critical point. Few here will have read the tender documents in full, let alone the bids (which are probably confidential). It is naive in the extreme to say "our bid was fully compliant, so I cannot understand how we lost"

 

[jon0844]

Won't the bids be made public once everything has been signed off? Or will they remain confidential forever?

Naturally, if they are made public and it is found that the media overreacted - it won't matter as they'll go quiet and Joe Public will have moved on to something else to be outraged by.

 

[DuncanD]

Well, the French and Germans manage to get around all the EU procurement rules when it suits...

At least the Germans don't have to. All major train producing companies have production facilities all over Germany:
Bombardier 4 factories + 2 for components, Siemens (at least) 3, Alstom 2 plus a number of smaller companies like Vossloh, Stadler etc. All those companies can exist well within a functioning, competitive market environment.

Once the contract is with a company, they are free to decide where to source their components. The body for the Traxx locos are made in Poland..

The problem in the UK is that nowhere else in the EU orders for trains are made by the government. This should be a task for the TOCs (as it was in the first years after privatisation) The mistake leading to the demise in british train building was the micromanagement of the railways. Building trains in the UK is simply not a viable business any more. There is no market for trains in the UK. Cascading 25 year old stock around is not a solution.

A recent refrancising in Germany prescribed using new trains - even if the "old ones" were just about 10 years old. Older trains are frequently sold to countries in east europe - similar to the class 87 being sold to Bulgaria.

So sell all Pacers and Sprinters east and let the ROSCOs order new trains.

 

[Eng274]

There are essentially three elements to a bid (whatever you are looking at):

[*]"value added" - those bits that were not specified in the tender, but are thrown in to add weight. Things such as dedicated technical support, training support. Almost inevitably, this is the area in which bids are won or lost. Equally, because they are extra to specification, there may be no direct comparison between bids.

While we may or may not know what other involvement Siemens are planning with this contract, its worth noting that in two other recent prominent build contracts, Siemens have been involved in the establishment of purpose-built traincare facilities (Manchester for TPE's 185s, Shields for SR's 380s). I don't know if this is through Siemens' own actions or requested as part of the specification; the tender for new Thameslink stock may have been won on the basis that new traincare facilities will be built to look after the new trains.

 

[LNW-GW Joint]

As for the damned EU and it's unwanted, unwelcome rules, no other EU member seems to be so sickenly obsessed with doggedly following it all to the letter, with a complete disregard for any negative effects on the nation. The sooner we get the hell out of it all, the better.

You'll be sending the BMW back then?

Then Lufthansa will switch its A380 engine supplier away from Rolls Royce (bang go more jobs in Derby).

And Toyota (at Derby/Deeside) will not be able to sell cars in Germany.

etc

We need the EU.

 

[jon0844]

I feel for any of the 'numbers' of jobs axed, which are all real people - but the harsh truth is that it's an industry that relies on fixed contracts. It's not a factory that sets up to build a train and then keeps doing so forever more, with trains being put on sale to anyone that wants one.

They have to bid to win contracts to build potentially limited production runs, and then weather the storm when there's no new ordering. Nobody working for Bombardier or other factories like this can be under any illusion that it works any other way, can they?

I agree that we need the EU. While we don't much that much, there are still some British companies actually doing quite well abroad, especially in Europe. This quicker people remember we're part of the EU, so it's not 'them v us', so it cuts both ways, the better!!

 

[Lampshade]

You'll be sending the BMW back then?

Then Lufthansa will switch its A380 engine supplier away from Rolls Royce (bang go more jobs in Derby).

And Toyota (at Derby/Deeside) will not be able to sell cars in Germany.

etc

We need the EU.

The answer is a free trade agreement.

 

[swt_passenger]

... the tender for new Thameslink stock may have been won on the basis that new traincare facilities will be built to look after the new trains.

They definitely are going into new facilities, the process has been underway a year or more now. Two sites, one a disused rail site at Three Bridges and one on part of the Hornsey site.

The latter building has halved in size since the plans were turned down by the local authority - following objections from locals whose views of the ECML would have been badly affected.

Following this, a major expansion of the Three Bridges site has been applied for.

More jobs for the Crawley area, less for north London - hope the Nimbys are pleased...

 

[Drsatan]

They definitely are going into new facilities, the process has been underway a year or more now. Two sites, one a disused rail site at Three Bridges and one on part of the Hornsey site.

The latter building has halved in size since the plans were turned down by the local authority - following objections from locals whose views of the ECML would have been badly affected.

Following this, a major expansion of the Three Bridges site has been applied for.

More jobs for the Crawley area, less for north London - hope the Nimbys are pleased...

I wonder what will happen to the XC depot at Three Bridges? (not that it's ever used since no XC services actually go to Brighton these days)

 

[Wyvern]

Then Lufthansa will switch its A380 engine supplier away from Rolls Royce (bang go more jobs in Derby).

The engine is chosen by the customer and there are only two choices.

 

[swt_passenger]

I wonder what will happen to the XC depot at Three Bridges? (not that it's ever used since no XC services actually go to Brighton these days)

I'd be surprised if anything existing will remain. The triangle between the main and Crawley lines is being completely redeveloped, and bang in the middle will be the new Three Bridges Control Centre, one of the thirteen proposed 'super signalling centres'.

 

[LNW-GW Joint]

The engine is chosen by the customer and there are only two choices.

Just like Thameslink then.

 

[BananaRepublic]

While we may or may not know what other involvement Siemens are planning with this contract, its worth noting that in two other recent prominent build contracts, Siemens have been involved in the establishment of purpose-built traincare facilities (Manchester for TPE's 185s, Shields for SR's 380s).
I don't know if this is through Siemens' own actions or requested as part of the specification; the tender for new Thameslink stock may have been won on the basis that new traincare facilities will be built to look after the new trains.

Previous Seimens contracts (SWT, LM, FTP, ScR etc) are for the supply and maintenance of trains. The trains don't belong to the TOC's, but are leased to them, Seimens being required to supply X serviceable and clean trains per day, with minimum condition, reliability and availability criteria.

I can't say offhand, but I think the financing arrangements do vary between each contract, where Seimens either own the trains in partnership with a financier, or they have a deal with a ROSCO.
However in all cases, Seimens own and run their own depots to provide the maintenance and servicing.
All the TOC has to do is drive them around all day and pay their bill; a bit like daily car rental.

Hitachi also supply trains (Class 395's) to SouthEastern through a similar contract.

It's a very cost efficient means of running trains, where the TOC doesn't take on the costs and risk of looking after the trains and the supplier has an incentive to deliver on the contract conditions and to contain their own costs. In theory that should drive efficiency and reliability for both parties.

The Thameslink contract and that for the Inter City Express Programme are being run in the same way. Seimens, along with their partners 3i will own and maintain the trains and the Thameslink TOC will pay the leasing bills.
The government isn't buying these trains, nor will they own them.
Hitachi will supply Super Express trains (SET's) for the IEP through a similar scheme.

Presumably, Bombardier's financial package failed to convince?

.

 

[Peter Mugridge]

Presumably, Bombardier's financial package failed to convince?

.

You are quite right; the whole life cost was £700 million higher, simply because of the credit rating difference between the two companies:

http://www.telegraph.co.uk/finance/...-on-Thameslink-because-of-contract-terms.html

 

[Eng274]

Previous Seimens contracts (SWT, LM, FTP, ScR etc) are for the supply and maintenance of trains. The trains don't belong to the TOC's, but are leased to them, Seimens being required to supply X serviceable and clean trains per day, with minimum condition, reliability and availability criteria.

I can't say offhand, but I think the financing arrangements do vary between each contract, where Seimens either own the trains in partnership with a financier, or they have a deal with a ROSCO.
However in all cases, Seimens own and run their own depots to provide the maintenance and servicing.
All the TOC has to do is drive them around all day and pay their bill; a bit like daily car rental.

Hitachi also supply trains (Class 395's) to SouthEastern through a similar contract.

It's a very cost efficient means of running trains, where the TOC doesn't take on the costs and risk of looking after the trains and the supplier has an incentive to deliver on the contract conditions and to contain their own costs. In theory that should drive efficiency and reliability for both parties.

The Thameslink contract and that for the Inter City Express Programme are being run in the same way. Seimens, along with their partners 3i will own and maintain the trains and the Thameslink TOC will pay the leasing bills.
The government isn't buying these trains, nor will they own them.
Hitachi will supply Super Express trains (SET's) for the IEP through a similar scheme.

Presumably, Bombardier's financial package failed to convince?

.

I am perfectly aware of how rolling stock is procured, leased and maintained in the UK thanks, and the benefits/constraints of this system. The bit in bold you highlighted was merely a question of whether the depots were requested by the tender specification or if Siemens added them in to try and swing the bid in their favour.

 

[starrymarkb]

Would the fact that Bombardier's aircraft division was struggling to sell their new CSeries airliner until recently (and the program had some false starts) have impacted on their group's credit rating?

 

[BananaRepublic]

I am perfectly aware of how rolling stock is procured, leased and maintained in the UK thanks, and the benefits/constraints of this system. The bit in bold you highlighted was merely a question of whether the depots were requested by the tender specification or if Siemens added them in to try and swing the bid in their favour.

OK apologies if I was teaching you to suck eggs.
IIRC, in the past Seimens offered the whole package in their bids. I may stand corrected, but I understand many if not all of those previous contracts were conducted quite differently to these DfT procurement exercises.

I know of one earlier case where the competitors were offering trains via the usual ROSCO route, where the TOC would provide maintenance at its existing depot; but Seimens won the contract with their all-inclusive package.

In the case of Thameslink and IEP, the DfT ITT required the bidders to supply trains with full finance and maintenance facilities.