Dream come true as Hitachi rail plans get go-ahead

Dream come true as rail plans get go-ahead

Artist's impression of proposed Hitachi Super Express

Field of Dreams: newton Aycliffe site

Hitachi vision

First published in Back On Track The Northern Echo: Photograph of the Author by , Parliamentary Correspondent

THE dream of bringing train-building back to the region of its birth - along with thousands of desperately-needed manufacturing jobs - finally came true yesterday.

After months of frustration and fear, Hitachi's ambitious plans to build a factory - and a manufacturing base to serve all of Europe - at Newton Aycliffe, County Durham, was given the go-ahead, to universal delight.

The £4.5bn Intercity Express Programme (IEP) deal secures at least 500 high-quality jobs in England's poorest region, plus many thousands more in manufacturing and service supply chains.

The Hitachi-led Agility consortium will deliver at least 530 new rail carriages, bringing faster, more reliable journeys - and 11,000 extra seats - on key inter-city routes.

The factory - dubbed the 'new Nissan', because of its importance - will be built next year, to open in 2013. The first 'bi-mode', diesel and electric trains will be delivered three years later, with all 100 on stream by 2018.

The long-delayed announcement triggered delight from campaigners, led by Sedgefield MP Phil Wilson, and victory for The Northern Echo's much-praised 'Back On Track' campaign.

Party hostilities were temporarily forgotten as Labour MPs heaped praise on Philip Hammond, the Conservative transport secretary. Darlington MP Jenny Chapman tweeted: "I could kiss you!!"

Both Tories and Liberal Democrat were quick to trumpet the second big investment delivered to Labour's most loyal region within days, after last Thursday's rescue of steelmaking on Teesside.

In a statement, Mr Hammond told MPs: "Coming just days after the news of the re-opening of the Redcar steel works, this is a massive - and very welcome - shot in the arm for the skilled work forces of the North-East's industrial heartland."

The delight and relief was crystal clear in the reaction of Mr Wilson, who said: "I'm just relieved that all our hard work has paid off."

Praising everyone from the North-East Chamber of Commerce, to trade unions, Durham County Council and The Northern Echo, Mr Wilson said; "We showed what the North-East is good at, which is working in partnership.

"We put together a factual economic case as to why Hitachi should be allowed to build its factory at Newton Aycliffe, which the government could not ignore.

"I lived through the 1980s and very high levels of unemployment - and I didn't want my constituents to have to live through that again."

Within minutes, Business Secretary Vince Cable announced that his department was offering "conditional funding" to Hitachi, although there was no hint of the size of the likely backing.

The good news was sealed by Mr Hammond's decision to opt for Hitachi's revolutionary 'bi-mode' proposal - while rejecting the alternative, of 'coupling' electric trains with diesel locomotives, as "second rate".

The Northern Echo revealed how this alternative proposal was unlikely to create any British jobs, because both the trains and engines would be bought "off the shelf", from abroad.

In stark contrast, transport ministers were presented with a study suggesting Hitachi's factory would deliver a £660m boost to the North-East over 20 years - £48 for every £1 invested.

Yesterday does not signal the end of drawn-out procurement process.

Agility Trains remains the "preferred bidder", with exact details of how the project will be financed still to be tied down.

However, Westminster sources suggested that only an unlikely intervention from the EU - over the legality of the re-tendering process - could now derail expected financial close by the end of the year.

Interviewed by The Northern Echo, a bullish Mr Hammond said: "We have spent a lot of time looking at the legal position. We would not proceed unless we were confident that we were complaint with our obligations."

Explaining his belief that the deal will be sealed by the end of 2011, Mr Hammond said: "Both parties are very confident that we have done a tremendous amount of work over the last few months.

"Hitachi have to line up their financing. They have the Japanese import-export bank behind them, but will also need to line up some financing in Europe.

"There are a few steps to go through yet, but everyone is confident that, for a company of the size and strength of Hitachi, these are not problems - these are processes, that have to be gone through."

The £4.5bn contract, to last 20 years, will be what Mr Hammond called an "innovative" PFI deal, making Hitachi responsible for building, owning, supplying and, also, maintaining its trains.

He said: "They get paid only for train availability - so if a train is out of service, or is rejected because it is not clean enough, they don't get paid for that journey."

The contract is £3bn cheaper- creating fewer jobs, to build 300 fewer carriages - than proposed when Hitachi was first declared the preferred bidder exactly two years ago, because of developing plans for high-speed rail.

Most trains running on the East Coast line will not be replaced, because the existing, electric 225 fleet can operate for a further "10-15 years" - by which time the first high-speed link will be imminent.

Most of the IEP trains will run on the Great Western line from London to Cardiff, which will be electrified, cutting the journey time to the Welsh capital to 1 hour 42 minutes.

Some new trains will be introduced on the East Coast, to add extra peak-hour services to Leeds and Newcastle and to serve towns such as Skipton - which are off the electric track.

On the decision to opt for 'bi-mode' trains, Mr Hammond said advocates of the rival option had been unable to prove that the 'coupling' of diesel locomotives could be done quickly enough.

He explained: "They were not prepared to put blood on paper for less than about nine minutes - and that's too long.

"That's a very big time penalty. When you are sitting in a station for nine minutes, waiting for a locomotive to be changed, that will feel like a very second-rate service."

Agility was also able to offer higher value for money, in its revised bid last September - and ministers were concerned of new risks if they went back to square one, he explained.

The Transport Secretary hinted at the sophisticated lobbying campaign by the Japanese government, which was desperate to secure its European foothold in County Durham.

He revealed: "I have become firm friends and personal acquaintances with the Japanese ambassador over the last nine months - he has his own chair in my office.

"I even got invited to the Emperor's birthday party last year, in London."

However, he stressed that Hitachi's plans to deliver a huge jobs boost in England's poorest region had not been a factor in his decision, because such an approach would be "illegal".

But he added: "Of course, it's a huge added bonus that, by coincidence, Hitachi are committed to building these trains in the North-East."

And Mr Hammond praised this paper's 'Back on Track' campaign, saying: "I recognise the huge head of steam that there has been behind the Northern Echo's campaign."

Comments (10)

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8:49am Wed 2 Mar 11

David Lacey says...

So Tory Governments have now delivered Nissan and Hitachi to the North East. Will Mr Merrick tell us what Labour did in their 13 years. Well there was.... and..... oh! and....
.
Um - actually NOTHING!
So Tory Governments have now delivered Nissan and Hitachi to the North East. Will Mr Merrick tell us what Labour did in their 13 years. Well there was.... and..... oh! and.... . Um - actually NOTHING! David Lacey
  • Score: 0

11:47am Wed 2 Mar 11

stoobydoo294 says...

well what can i say to that? yeah they may have brought Hitachi and Nissan to the north east, but what happened to the mines and steel works, oh yeah they were closed down putting thousands out of work and destroying communities, Are people so narrow minded that they forgot what happened 26years ago and recently with corus, labour picked up tory problems and tory have done exactly the same with labour "touche"
well what can i say to that? yeah they may have brought Hitachi and Nissan to the north east, but what happened to the mines and steel works, oh yeah they were closed down putting thousands out of work and destroying communities, Are people so narrow minded that they forgot what happened 26years ago and recently with corus, labour picked up tory problems and tory have done exactly the same with labour "touche" stoobydoo294
  • Score: 0

12:12pm Wed 2 Mar 11

Railrunner says...

Nine minutes? Rubbish. The coupling of a loco to an EMU can be achieved in one. Brakes tested, systems energised, fire system check another two. The deal was rigged to get the more expensive to buy electro-diesel version. So expensive only 5 carriages will be built for every 8 replaced. So heavy they will be 15-20 tons heavier than the coaches they replace. Notice now that it's only semi-skilled jobs for the manufacture of these trains, while hundreds of skilled men elsewhere in the UK lose their jobs, to enable some Japanese kits to be put together. This is not Honda or Nissan, this is a short term deal. once the deliveries are complete, the subsidy dries up. The factory will shut. All there will be left are the depots in Bristol and elsewhere, and a smaller rail network. We saw all the lobbying by the Japanese going on, while other concerns, including UK companies employing far more people were denied access.
Nine minutes? Rubbish. The coupling of a loco to an EMU can be achieved in one. Brakes tested, systems energised, fire system check another two. The deal was rigged to get the more expensive to buy electro-diesel version. So expensive only 5 carriages will be built for every 8 replaced. So heavy they will be 15-20 tons heavier than the coaches they replace. Notice now that it's only semi-skilled jobs for the manufacture of these trains, while hundreds of skilled men elsewhere in the UK lose their jobs, to enable some Japanese kits to be put together. This is not Honda or Nissan, this is a short term deal. once the deliveries are complete, the subsidy dries up. The factory will shut. All there will be left are the depots in Bristol and elsewhere, and a smaller rail network. We saw all the lobbying by the Japanese going on, while other concerns, including UK companies employing far more people were denied access. Railrunner
  • Score: 0

12:41pm Wed 2 Mar 11

David Lacey says...

stoobydoo294
.
Labour closed more mines than were closed under the Tories. That is a simple fact. And those closed by the latter were rendered uneconomic due to a certain mad man who ran the NUM. Corus was owned by an Indian company. It wasn't a Government decision to shut the Redcar plant, but any case it happened during Labour's watch.
.
Railrunner is now all over this site telling us that Hammond is a liar and Hitachi are cheats. Sour grapes comes to mind.
.
This is great news for the North East. To hell with the rest of the country - we have been the fall guys for too long.
stoobydoo294 . Labour closed more mines than were closed under the Tories. That is a simple fact. And those closed by the latter were rendered uneconomic due to a certain mad man who ran the NUM. Corus was owned by an Indian company. It wasn't a Government decision to shut the Redcar plant, but any case it happened during Labour's watch. . Railrunner is now all over this site telling us that Hammond is a liar and Hitachi are cheats. Sour grapes comes to mind. . This is great news for the North East. To hell with the rest of the country - we have been the fall guys for too long. David Lacey
  • Score: 0

1:00pm Wed 2 Mar 11

stoobydoo294 says...

I have too agree with railrunner and yeah david lacey in some respect it may be good for the north east, but it may only be a quick fix, they don't work and the whole mines and steel works, need we focus on the shipyards as well, at one point they were our biggest export, and where are we now £15billion in the red, the elusive country debt, with the cuts that follow, more jobs on the line, less services, What the NUM leader did was bad true, but when you look at the impact on the pit villages, rows of houses demolished prosperous towns now ghost towns and maybe its due to the whole supermarket culture we are. unless you grew up in a pit village you can't experience the whole watching of towns dying, and wondering why, people choose to use drugs, is the whole hitachi thing goin to improve that it may improve the unemployment levels but for how long, a slight peak before another huge trough, leading to yet more unemployment, greater debt. they tried a quick fix with the NHS, absolutely no disrespect to the workers who were asked to come and ease the weight, it failed. Hitachi may be good for the North east, but for how long?
I have too agree with railrunner and yeah david lacey in some respect it may be good for the north east, but it may only be a quick fix, they don't work and the whole mines and steel works, need we focus on the shipyards as well, at one point they were our biggest export, and where are we now £15billion in the red, the elusive country debt, with the cuts that follow, more jobs on the line, less services, What the NUM leader did was bad true, but when you look at the impact on the pit villages, rows of houses demolished prosperous towns now ghost towns and maybe its due to the whole supermarket culture we are. unless you grew up in a pit village you can't experience the whole watching of towns dying, and wondering why, people choose to use drugs, is the whole hitachi thing goin to improve that it may improve the unemployment levels but for how long, a slight peak before another huge trough, leading to yet more unemployment, greater debt. they tried a quick fix with the NHS, absolutely no disrespect to the workers who were asked to come and ease the weight, it failed. Hitachi may be good for the North east, but for how long? stoobydoo294
  • Score: 0

11:44pm Wed 2 Mar 11

gramps427 says...

Congratulations to all who put together the case to bring Hitachi to this area.
About 500 skilled and semi skilled jobs is a good start to the regeneration of the Tees Valley region and its neighbours.
What struck me with one particular interview on the TV was the metion of this areas Engineering background; its a vital piece of the puzzle to bring more business back here.
We have to take this regions plus points out into the global business scene and tell people in China, Africa and the Americas that we can produce high quality work and get it delivered to where it needs to go by air, sea or land. Don't sit back and pat yorselves on the back just before the local elections, get talking on the phone to the banks in China and its embassy, the banks in India and Brazil. Sell this area in the same way you are selling holidays. We have had two bits of wonderful news in the last fortnight; lets start working on bringing more good news on semi-skilled jobs to employ thousands, not just hundreds of unemployed workers in factories, offices the airports, sea ports, railways and roads. Let all the politicians work together as they have to bring about this new begining.
Congratulations to all who put together the case to bring Hitachi to this area. About 500 skilled and semi skilled jobs is a good start to the regeneration of the Tees Valley region and its neighbours. What struck me with one particular interview on the TV was the metion of this areas Engineering background; its a vital piece of the puzzle to bring more business back here. We have to take this regions plus points out into the global business scene and tell people in China, Africa and the Americas that we can produce high quality work and get it delivered to where it needs to go by air, sea or land. Don't sit back and pat yorselves on the back just before the local elections, get talking on the phone to the banks in China and its embassy, the banks in India and Brazil. Sell this area in the same way you are selling holidays. We have had two bits of wonderful news in the last fortnight; lets start working on bringing more good news on semi-skilled jobs to employ thousands, not just hundreds of unemployed workers in factories, offices the airports, sea ports, railways and roads. Let all the politicians work together as they have to bring about this new begining. gramps427
  • Score: 0

9:27am Thu 3 Mar 11

Railrunner says...

The proposed timetable for using all these short trains to replace longer ones will see lots of coupling and uncoupling in stations such as Paddington, Bristol, Cardiff, Edinburgh and Kings Cross to meet peak demand. According to a quote in the Northern Echo it would take 9 minutes to couple a loco. So it will also take 9 minutes to couple two five car IEP units. The systems used are identical as the locos are to be purpose built, and would be much cheaper than building bi-modes over pure EMU trains. This quote in the paper yesterday has circulated very quickly and is already being disputed/denied by competitors and adds to the evidence that the whole process was rigged in favour of Hitachi against the Bombardier/Siemens consortium whose wholly compliant bid was rejected in favour of the non-compliant Hitachi one. Thanks Northern Echo, you've handed the legal team a nice little bomb with a nine minute fuse. For the record we daily couple such things and test them, before setting off, including crew changes, within 4 minutes.
The proposed timetable for using all these short trains to replace longer ones will see lots of coupling and uncoupling in stations such as Paddington, Bristol, Cardiff, Edinburgh and Kings Cross to meet peak demand. According to a quote in the Northern Echo it would take 9 minutes to couple a loco. So it will also take 9 minutes to couple two five car IEP units. The systems used are identical as the locos are to be purpose built, and would be much cheaper than building bi-modes over pure EMU trains. This quote in the paper yesterday has circulated very quickly and is already being disputed/denied by competitors and adds to the evidence that the whole process was rigged in favour of Hitachi against the Bombardier/Siemens consortium whose wholly compliant bid was rejected in favour of the non-compliant Hitachi one. Thanks Northern Echo, you've handed the legal team a nice little bomb with a nine minute fuse. For the record we daily couple such things and test them, before setting off, including crew changes, within 4 minutes. Railrunner
  • Score: 0

9:43am Thu 3 Mar 11

Railrunner says...

David Lacey, I'm not calling Hammond a liar, I'm saying he has been seriously misled by Hitachi in league with a man called Stuart Baker at the Department for Transport. The nine minute quote in yesterdays Northern Echo was a gift for the legal people. Are you now claiming it would take that long to couple a purpose built loco to an IEP? Yet again I have to say that if Hitachi were building the right train in a level competition there would be no complaint from me about a factory anywhere in the country, but it is so clearly the wrong train, far too expensive to buy and to run, too short, and relies too much on a non secure fuel source. It will actually produce a disincentive to more extensive electrification. Hitachi lied about the reliability levels of their trains in south east England. They were caught trying to re-write the laws of physics on their IEP design, and then they were allowed to alter much of the design when the bidding process specifically forbade it. The competitors were not permitted to change anything in their bid. In response to the McNulty review alternatives were put forward and now that alternative is being credited with this nine minute quote. The answer to the relevant question was 4 minutes not nine. Who had access to the minister to pass on that information-The man in the DfT. Thanks Northern Echo.
David Lacey, I'm not calling Hammond a liar, I'm saying he has been seriously misled by Hitachi in league with a man called Stuart Baker at the Department for Transport. The nine minute quote in yesterdays Northern Echo was a gift for the legal people. Are you now claiming it would take that long to couple a purpose built loco to an IEP? Yet again I have to say that if Hitachi were building the right train in a level competition there would be no complaint from me about a factory anywhere in the country, but it is so clearly the wrong train, far too expensive to buy and to run, too short, and relies too much on a non secure fuel source. It will actually produce a disincentive to more extensive electrification. Hitachi lied about the reliability levels of their trains in south east England. They were caught trying to re-write the laws of physics on their IEP design, and then they were allowed to alter much of the design when the bidding process specifically forbade it. The competitors were not permitted to change anything in their bid. In response to the McNulty review alternatives were put forward and now that alternative is being credited with this nine minute quote. The answer to the relevant question was 4 minutes not nine. Who had access to the minister to pass on that information-The man in the DfT. Thanks Northern Echo. Railrunner
  • Score: 0

10:42am Thu 3 Mar 11

his308 says...

Great news but how will anyone get a job there? Recruitment will be in hand already and local people will be kept at arms length relying on the job centre! By which time most of the positions will have gone. Comments from recruiters please.
Great news but how will anyone get a job there? Recruitment will be in hand already and local people will be kept at arms length relying on the job centre! By which time most of the positions will have gone. Comments from recruiters please. his308
  • Score: 0

11:28am Thu 3 Mar 11

Railrunner says...

It will be a while yet, the lawyers have only just started.
It will be a while yet, the lawyers have only just started. Railrunner
  • Score: 0

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