It has been suggested in transport select committee hearings that Siemens’ ability to secure cheaper debt, as opposed to the quality of its trains, was the key factor in securing preferred bidder status for the Thameslink project over Canadian owned manufacturer Bombardier.
However, German manufacturing group Siemens has urged the government to keep the financial details of its bid for the £1.4bn Thameslink contract confidential after MPs called for further clarity of the bidding process.
The transport select committee has recommended that the government reveal the financial difference between the Siemens offer, which has secured frontrunner status, and that of second-placed bidder Bombardier. In a report last month, the committee also urged the public spending watchdog, the National Audit Office, to scrutinize the deal.
Bombardier has warned that the decision will cost more than 1,400 jobs at its Derby plant in the wake of the decision. Siemens and Bombardier are also going head-to-head for the £1bn Crossrail contract, viewed as vital for Derby facility’s future. Siemens has been present in the UK for 168 years and is now a major UK-wide employer, with around 16,000 UK employees, with 50% involved in UK manufacturing and engineering. Despite this, Siemens will make the Thameslink trains in Germany whereas Bombardier would have manufacturered in the UK.
Steve Scrimshaw, the head of UK rail at Siemens, told the Guardian that revealing the financial calculations behind bids would undermine the company’s ability to win contests in the future. “I don’t think that it is beneficial to any party that has been involved in a competitive process. Such information is commercially sensitive and highly confidential,” said Scrimshaw.
Scrimshaw added that Siemens had taken part in a “fair and transparent” bidding process for the Thameslink contract, which the company expects to finalise this year despite reports that it is struggling to put the financing together. “We are confident that we will close the contracts in early 2012,” he said. According to a recent report, concluding the contract for 1,200 carriages on the Thameslink rail route has been held up by a lack of agreement between the Siemens-led consortium and banks. However, Siemens is confident it will secure the credit it needs.