Time to look to the future and stop dwelling on huge blow of Thameslink
In an exclusive interview earlier this month, Transport Secretary Patrick McLoughlin told us Derby train-maker Bombardier needed to "compete" to win government work. Paul Roberts, chief country representative of Bombardier Transportation UK, responds to his comments. Robin Johnson asks the questions.
QWHAT are your thoughts on the Transport Secretary's comments that Bombardier has to "compete" for government work?
AI couldn't agree with him more. I inherited a UK business that had been badly affected by the extraordinary fall-out from Thameslink.
My role has been to try to draw a line under Thameslink, get the business across the whole UK back in shape and compete for new orders.
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Largely speaking, I believe I have been successful so far in doing that.
We won the Southern Railway contract at the end of 2011 and an extension to that contract at the end of 2012.
We also now have a successful services business in the UK, employing 1,800 people, many of them close to Derby. That business recently won a £100 million contract from Virgin for maintaining rolling stock on the West Coast Main Line.
QMr McLoughlin has said the company cannot expect any handouts, that he "can't just give away contracts to keep a company fully occupied". Has Bombardier ever asked for "handouts" from the Government?
AThis company isn't a charity case. We win contracts, in the UK and all over the world, because our bids are competitive, our products and service offerings outmatch the competition and we deliver on our commitments to customers.
Let's be clear about this: the news that we had lost Thameslink caught all of us by surprise and we were bitterly disappointed with the result. It was a huge blow.
We are humbled by the support we have received from across the UK, particularly in Derby. But the only way to secure a sustainable future for this business is to try to put Thameslink behind us.
We want to stop dwelling on the past and concentrate on the future. We have been successful in winning more orders since Thameslink. There are a growing number of opportunities for us in the UK.
QWhat reassurances have you been given that the Government has "learned the lessons" from the Thameslink contract – such as finance issues and taking into account the social and economic factors of each bid?
AThis is really a question about Crossrail and I'm afraid the rules state that I'm not allowed to make any comments about that procurement process. It's also a question for the Government to answer, not me.
QWhile I appreciate that, as one of the bidders for the Crossrail contract, you are restricted as to what you can say about this deal, could you give an indication about how confident you are of landing this work and what it would mean for the Derby factory? Are you confident that Bombardier has put in a strong bid?
AIt will be a tough competition and it is very difficult to call. All I can say is that we are bidding to win.
We have submitted a competitive bid – on technology, strength of product and cost.
QWould it be fair to say that, if Bombardier did not win Crossrail, it is feasible that Derby (and the UK) could lose its design engineering capability?
AI don't want to comment directly about Crossrail.
In general, it is self-evident that we need to keep winning orders if we are going to have a viable business in the UK – at all of our sites. This is the case for any business. But we are confident of winning more orders. Derby is currently occupied with delivering carriages for Southern and London Underground. Our engineers are busy on a range of projects, both in the UK and across the whole Bombardier Transportation Group.
QThe work that has come from Southern is obviously welcome. Are there any other potential contracts, aside from Crossrail, that could prolong the life of Litchurch Lane and provide it with a long-term future?
AWe have a growing number of commercial opportunities in the UK such as the competition for more trains for Southern, London Overground, London Underground, eVoyager and, of course, Crossrail. Rail re-franchising is another opportunity for new rolling stock and maintenance contracts.
QMr McLoughlin said he was frustrated at the length of time it takes for large contracts to be determined. Are there any suggestions from within the rail industry that could help speed up this process?
AI share the Secretary of State's frustration but I am encouraged by his determination to fix the problems. But not all contracts take a long time. If you look at the contract we signed with Southern in December 2011 – the first of those new trains came off the production line only one year later, and they will be running on the network later this year.
QIt has been reported that Siemens may be having trouble raising the necessary finance to carry out the Thameslink contract. If Bombardier had won the work, would it have encountered similar issues?
AI don't think it's helpful to add to the speculation already out there. As we talk now, the Thameslink contract still hasn't been signed – although it is said to be very close.
QWhat is the latest situation with eVoyager?
The Transport Secretary has said the project is not completely dead – but admits that the massive investment in full electrification has led to a re-evaluation of hybrid trains. Do you think eVoyager will happen?
AWe hope it will still happen. We think it makes sense. It offers flexibility, value for money, and is environmentally friendly.
The project has definitely slowed down and the main reason seems to be that the extent of line electrification has brought the business case into question.
But we are in discussions with the DfT about the project and hope it will still get off the ground.
QThe Transport Secretary today announced more details about the latest phase of HS2.
Could this project provide work for Bombardier in Derby – or is it so far away that it would be too difficult to say whether the Derby site would be around to benefit?
AIt really is too far away to make any meaningful comment about potential work for Derby.
We are monitoring the HS2 debate closely. Bombardier has over 20 years experience in the high speed sector and has delivered some 850 trains and vehicles for high speed applications.
We know how the technology works. And our strategy differs from our competitors in that we believe in manufacturing as close to our customers as possible.
NEW ORDERS AFTER MISSING OUT ON £1.4bn DEAL
SINCE missing out on the £1.4 billion Thameslink contract more than 18 months ago, Bombardier has secured some new orders.
In December 2011, the Litchurch Lane firm won a £188 million contract to build 130 Electrostar carriages for Southern Railway. It was then further boosted by an extension to that deal, when Southern decided to exercise an option for a further 40 Electrostars, worth around £60 million.
Further down the line, there is also the possibility of Southern ordering a further 200-plus carriages – a deal that could be worth hundreds of millions of pounds to Bombardier.
And more work could come the way of Bombardier from Transport for London.
Earlier this month, the Derby Telegraph revealed that it had been in talks with Bombardier over supplying an extra 82 carriages to increase capacity on London Overground services.
Industry experts believe the work could be worth around £120 million.
And Bombardier is still hopeful the eVoyager project – to convert a fleet of existing CrossCountry trains to diesel/electric hybrid power – will go ahead.
It is understood that work could be worth £127 million to the firm.
But the ultimate prize for Bombardier and its 1,600 staff at Litchurch Lane is the £1 billion Crossrail deal.