A TRAIN manufacturer hoping to create thousands of jobs in the region has expressed its disappointment at the Government's decision to delay an announcement on the Intercity Express Programme (IEP).

Hitachi said it would consider its position after holding further talks with the Department for Transport.

Transport Secretary Philip Hammond announced this morning that the Government would order 2,100 new carriages and invest £14bn in rail maintenance and infrastructure over the next four years.

However, the Minister said a decision on replacing the country's aging intercity trains would not be taken until the New Year.

He said the Hitachi-led Agility Trains proposal remained an option, however he said a second proposal from an unnamed bidder was also being considered.

Agility's bid envisages a mixed fleet: some all-electric trains, and some electric trains which are also equipped with underfloor diesel engines.

The alternative is for a fleet of new all-electric trains which could be coupled to new diesel locomotives where the overhead electric power lines end.

Mr Hammond said: "Both these options would allow us to preserve through-journeys between London and parts of the rail network which are not electrified.

"Both of them would deliver faster journey times. For example, we expect to see a time saving of at least 15 minutes, for the journey between Cardiff and London bringing it below two hours."

He added: "This is a major decision which will affect intercity rail travel for decades, and we must get it right."

He said additional work was required within the Department, with Agility Trains, and with the Welsh Assembly Government on the business case for electrification into Wales.

"I expect to announce a final decision on IEP, and on further Great Western electrification, in the New Year," he said.

In response, Hitachi, which has indicated it would build a plant at Newton Aycliffe if it won the contract, said: "Hitachi continues to see the UK as one of our important European markets.

"However we are disappointed that there is yet no decision on our bid for the IEP, and therefore on our plans to bring jobs to the UK. We will be continuing our talks with the Department for Transport and will consider our position in the light of these."