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Crossrail partner loses trains battle Dec 2011
TunnelTalk reporting
A review of how funding of the £1 billion contract to build 60 trains for London's Crossrail should be raised has decided upon a Private Finance Initiative (PFI) method, with the possibility of up to 30% of public financing.

An order for 60 new trains is at stake

The decision is a blow to Transport for London (TfL), one of the delivery partners in the £14.5 billion Crossrail project. It wanted to raise all the money itself by increasing its public debt level and acquiring the trains directly. Such a move might favour UK-based Canadian rolling stock manufacturer Bombardier. TfL argued that it could borrow money more cheaply than the private sector.
Bombardier cut 1,400 British jobs at its Derby factory earlier this year after losing out to German-based Siemens for a £1.4 billion contract to build 1,200 carriages for British railway company Network Rail.
It is argued that current European Union PFI procurement rules favour foreign bidders, especially in cases where the company concerned, including Siemens, has a banking arm that can assist with raising private finance.
Both Siemens and Bombardier are on a list of four companies that have been invited to tender for construction of the 200m-long 1,500 capacity trains, but in September award of the contract was deferred six months until 2014. Crossrail said the delay in delivering the trains until May 2017 would save taxpayers tens of millions of pounds by reducing the amount of time the rolling stock would sit unused in sidings waiting for the tunnelling and track infrastructure to be completed.

Crossrail tunnelled alignment under London

Crossrail said the delay would also allow time for a review of public procurement rules and an examination of the extent to which the UK Government could set out requirements and evaluation criteria with a sharper focus on the UK's strategic interest.
A full announcement on the procurement and financing of the Crossrail trains contract is expected early in 2012. Other shortlisted bidders for the contract are Hitachi Rail Europe and Construcciones Auxiliar de Ferrocarriles SA.
References
Delaying train delivery will save millions - TunnelTalk, Sep 2011
Scheduling for success at Crossrail - TunnelTalk, April 2011
Crossrail management mobilized - TunnelTalk, May 2009

           

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