Fears for the future of Hitachi’s train factory in County Durham have reignited arguments over the firm missing out on the contract to build the new Tyne and Wear Metro trains – but the row has been branded “smoke and mirrors”.

The Japanese manufacturer was among the three finalists bidding to build a long-awaited new fleet for the Metro system, before Swiss company Stadler was awarded the contract in 2020.

That decision sparked a massive political row at the time, which has now re-emerged amid concerns over a gap in orders at Hitachi’s Newton Aycliffe factory that could threaten hundreds of North East jobs.

Prominent Conservative politicians in the region mounted new attacks on Monday night, claiming that it was “absolute madness” for Hitachi to have been overlooked.

But decision-makers have restated that publicly-owned Metro operator Nexus was bound by procurement laws requiring it to choose the bid that was shown to offer best value for money, while the Local Democracy Reporting Service has also been told that the deal would not have solved Hitachi’s current problems in any case.

One rail industry source close to the Hitachi factory described comments made by North East mayoral candidate Guy Renner-Thompson as a “red herring”.

They explained that, had Hitachi been awarded the Metro contract, those trains would be rolling off the production line now and therefore would not have plugged an upcoming gap in orders.

The factory, which employs around 700 people, is currently working on major contracts for West Coast and East Midlands railways – but work on these is due to decline by October 2024, according to the Unite union, with no new contracts in place in the short term.

The Tory Government has been urged to extend the company’s West Coast contract in order to safeguard jobs.

A Hitachi Rail spokesperson said: “We have been engaged in discussions at all levels of the UK Government for two years, in an attempt to find a solution to the production gap at our Newton Aycliffe manufacturing facility.

“Disappointingly these discussions have not resulted in a positive resolution. We are now reviewing all remaining options available to us in order to keep our manufacturing teams building rolling stock to support the UK rail industry.”

Mr Renner-Thompson claimed on Monday evening that it was losing out on the £700 million contract to build and maintain the new Metros which had “put the factory’s future in doubt”.

He said it was “absolute madness for the contract for the new Metro trains to go to a Swiss company” and that the value of protecting jobs at Hitachi “far outstrips any savings in getting the trains a few quid cheaper”, while Tees Valley mayor Ben Houchen accused Labour-run councils in Tyne and Wear of having “failed” the major employer.

Gateshead Council leader Martin Gannon replied: “You can’t just give a contract to your mates or to a local factory. It is an open procurement process covered by legislation. If we had conflicted with that legislation we would have been in breach of the law and probably been sued by other potential contractors.”

After reports first emerged that Hitachi would not win the Metro contract in September 2019, local council leaders blamed a “Brexit risk premium” that Japanese companies were being told to add into bids due to worries about the impact of Britain leaving the European Union.

Kim McGuinness, Labour’s North East mayor candidate, called the return to the row “smoke and mirrors”.

The Northern Echo: Kim McGuinness speaking at the event Credit: SARAH CALDECOTT

She added: “I would have loved to have seen Metro trains being built in our region, but that’s a four-year-old order that doesn’t doesn’t impact jobs today. These Tory Metro claims are a distraction that does nothing to save 750 jobs.”

A source close to Nexus said that its competitive process for the new trains had been carried out in compliance with UK procurement laws.

Stadler’s fleet of trains was meant to start entering passenger service last summer, but has been hit with several delays – with the most recent setback, relating to an issue with the trains’ traction system, leading Nexus to say it now hopes to have the first of them in use by the end of 2024.

Asked to respond to the suggestion that the Metro deal would not have plugged Hitachi’s looming production gap, Mr Renner-Thompson told the LDRS that the maintenance element of the contract would have provided some ongoing work for its staff.

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He added: “It is easy to cry over spilt milk and we now have to look forward. Going forward, I would want us to look more at the social value as well as monetary value. If you are going off up front cash [in assessing a bid] that might not actually be the best return over five, 10, 15 years.”

After Mr Renner-Thompson accused him of having “sat back” during the Nexus procurement, North of Tyne mayor Jamie Driscoll called on his Tory rival to withdraw those comments.

Mr Driscoll, who is also standing in the North East mayoral election as an independent, added that the procurement had begun 16 months before he was elected and said: “I’m lobbying the Department for Transport to sign-off the new West Coast trains to keep the Hitachi factory open. The decision to do this is in the hands of Conservative ministers.”