What an appeal against Siemens Mobility's TfL contract means for Goole
By Hull Daily Mail | Posted: 1 Aug 2018
News broke last week that train manufacturers Bombardier and Hitachi had lodged a legal challenge against the decision to award a £1.5bn tube train contract to Siemens Mobility.
The announcement has sent ripples of fear around the region that the £200 m factory set to be built in Goole – providing jobs for up to 700 people – could have hit a major hurdle.
Siemens has stood firm in its belief it is the right company to build the 94 new underground trains, and on the face of it, so has Transport for London.
But what of the threat from Bombardier and Hitachi, and what does history tell us?
Contract appeals could still be considered a rare action, but it is something which is becoming more common in the UK.
Bombardier has its own history of appeals, having taken action against Merseyrail after it awarded a contract in 2016 to Swiss rail manufacturer Stadler for the creation of 52 new trains in Liverpool.
On that occasion, Stadler kept the contract, and in June this year the company announced it was to start work on the trains.
Virgin Trains secured a landmark victory however, when they mounted a legal challenge against a government decision to award a 13-year West Coast franchise to FirstGroup back in 2012.
Although not a construction-based contract, the investigation which followed led to three Department for Transport officials being suspended for making mistakes in the decision process.
Virgin was subsequently awarded the contract to run its services on the line.
Siemens Mobility is standing its ground in the wake of the legal challenge from Bombardier and Hitachi.
A statement released by the company said: “Siemens Mobility Limited has been made aware of high court proceedings issued with regards Transport for London’s intention to award the Deep Tube Procurement contract to Siemens.
“We believe our offer represents a strong and innovative solution combined with value for money for the UK taxpayer. As the procurement is now subject to legal action we are unable to comment further on this subject.”
Transport for London has also appeared to re-affirm its decision to award Siemens with the contract, but acknowledged it would respond to the appeal.
A spokesman said: “We have been notified that they have issued claim forms in the High Court. We will review these claims and will respond to them.
“We see no good basis for these claims to be issued and are disappointed that these companies have chosen to take this step.”
One thing is clear in what has become a very complex situation – both Bombardier and Hitachi must believe they have a good case against the Siemens ruling.
The pair have teamed up to appeal against the contract awarding, and a nervous wait is now inevitable.
Hundreds of prospective jobs in East Yorkshire are at stake, and Siemens’ plans for Goole is a mutually-agreed coup for the town.
Whatever happens now, a benchmark has been set. Companies are within their rights to appeal against contract rulings, and it looks like they are not afraid to do so.