TRANSPORT ministers have delayed a decision over whether to go through with a £7.5 billion deal with a competitor of Derby-based train maker Bombardier.

The Litchurch Lane firm was knocked out of the running to build 1,400 carriages for the Government's Intercity Express Programme (IEP) last year, with ministers preferring the bid put together by rival Agility Trains.

But shortly before a contract was due to be signed with Agility, and as the recession began to bite, the previous Labour Government put the deal on ice – raising hopes that Bombardier may have a chance to re-enter the contest.

At the time, then-Transport Secretary Andrew Adonis asked Sir Andrew Foster to review the IEP deal to see if it gave value for money and to determine whether the technical specifications of the trains on offer were right.

Yesterday, Sir Andrew completed his review and concluded that alternatives to purchasing the trains from Agility should be looked at in greater depth.

Sir Andrew wrote: "[My] review team has done its best within the time available to outline a fresh case for some credible alternative options.

"Their analysis… suggests that the alternatives could well represent good value for money."

The IEP deal aimed to pay a manufacturer to build trains that would run on the East Coast Mainline and the Great Western Mainline.

But Sir Andrew suggested that some of the trains on offer may not be able to meet journey time targets that the Department for Transport (DfT) had set down. Instead of buying a fleet of new trains under the IEP deal, Sir Andrew said, it may now be more financially viable to extend the life of current trains running on the routes.

In addition, Sir Andrew said, the Government could purchase a smaller number of new trains – possibly ones with a different specification to those currently on offer under the IEP deal agreed with Agility.

If that was the case then it is likely that the Government would have to tender a new maintenance contract for the old trains, as well as a different contract to build the new trains it now wanted.

That would represent a chance for Bombardier to win contracts which otherwise would not have existed had Agility's IEP deal gone ahead. The Derby firm said it would be inappropriate to comment given that it is the reserve bidder for the IEP deal. But a Conservative party source said the new situation represented a strong opportunity for Bombardier.

The source said: "If there are significant changes to the contract it may be that it needs to be renegotiated and therefore put through the tendering process again.

"It may be that totally new contracts need to be tendered – if that is the case then Bombardier would be well placed to enter the contest for anything that comes up."

The new Transport Secretary, Phillip Hammond, said that a final decision on what to do with IEP would now be made in October, when the Government completes its review of all spending.

In the meantime, Bombardier is also bidding for another Government contract to build 1,100 carriages for the Thameslink programme.

A spokesman from the DfT said the Government would also not be able to name a preferred bidder for Thameslink until after its spending review had been completed.