Train contracts: Ministers criticised by MPs' committee

The Intercity Express Programme will replace a fleet of from the 1970s

Taxpayers have been left "bearing all the risk" from purchases of new trains worth £10.5bn, MPs say.

The Public Accounts Committee criticised the Department for Transport (DfT) for buying stock itself for the Intercity Express programme and the Thameslink project.

The MPs also said it was "extremely disappointing" that the Thameslink carriages would not be built in the UK.

The DfT said the schemes would "bring enormous benefits to passengers".

The committee said the government had decided to lead on the procurement on the two schemes, "despite having no previous experience of doing so".

'Massive complexity'

The contracts are to supply, finance and maintain the new carriages. Previously, this would be done by the train operating companies, the report said.

But in this instance, the DfT had decided to intervene because of the "massive scale and complexity of both procurements".

A Hitachi-led consortium is supplying 866 new carriages for the Intercity Express programme, which will replace ageing trains on the Great Western and East Coast lines.

In the other contract, German company Siemens is supplying 1,140 new Thameslink coaches to provide improved capacity on cross-London rail routes.

The combined cost of the two contracts is about £10.5bn.

The Department for Transport said both contracts would create jobs across the rail industry

The report said that by buying the trains directly, the DfT had taken on the risk of passenger forecasts being wrong.

"If demand proves to be lower than forecast, taxpayers would have to cover the costs of any financial shortfall," it said.

"These two major projects also demonstrate yet again that the department has limited capacity and capability to manage large-scale procurements, and that it remains overly reliant on consultants."

'More assertive'

The MPs welcomed Hitachi's decision to build 592 carriages in County Durham, creating a reported 900 new jobs, but committee chairwoman Margaret Hodge added: "It is extremely disappointing that Siemens will not also be manufacturing the Thameslink carriages in the UK, when the £2.8bn contract is funded by the UK taxpayer and farepayer."

The MPs said the government should be "more assertive" in asking for information from contractors in this area.

Siemens is building the 1,140 carriages in Germany, but claims up to 2,000 jobs will be created in the UK supply chain.

Mick Cash, general secretary of the RMT transport union, said: "The companies using these trains get to privatise the profits while the public get to shoulder over £10bn of risks. It is an absolute disgrace."

A DfT spokesman said: "Successive governments have considered how best to deliver these orders and have come to the same conclusion, that government should lead with expert support and advice from the train operating companies.

"IEP and Thameslink are making excellent progress and are on track to deliver very good value for taxpayers and improved services for passengers. They are also creating thousands of new jobs across the UK rail industry."