It emerged yesterday that one of three bidders, Siemens of Germany, had pulled out of the shortlist while Adtranz, the joint venture between ABB of Sweden and Daimler Benz, was lagging behind GEC. Industry sources said GEC had been chosen for the final detailed discussions on the order.
The joint bid made by GEC and Fiat would guarantee jobs at GEC-Alsthom's plants at Birmingham and Preston, which employ just under 2,000 people. About 70 per cent of the work would come to the UK, with bogies, tilting mechanisms and body shells sourced from Italy and the remainder of the work, including final assembly, carried out in Britain.
The 55 trains, each with seven carriages and capable of speeds of up to 160mph, would be based on Fiat's Italian Pendolino design. They would cut journey times to Birmingham to one hour, replacing some of the most outdated stock on the rail network. Virgin was yesterday heavily criticised for the reliability of its West Coast services.
Siemens yesterday attacked Virgin, claiming the operator had insisted on draconian penalty clauses for late delivery amounting to some 30 per cent of the cost of the order. Jurgen Gehrels, Siemens UK chief executive, said Virgin had also insisted on unrealistic delivery times.
Separately yesterday it emerged that Siemens has won a contract worth up to pounds 65m to supply a fleet of 16 electric trains to Regional Railways North East, the privatised train operator based in York. The 100mph trains, which will be leased through Angel, one of the three rolling- stock leasing groups, will replace a fleet of 20 trains dating from the 1960s.
The new trains, which are similar to those built by Siemens for the Heathrow Express line, will be assembled in Spain, with parts supplied from Germany and some from Britain. The UK contribution includes communications and electronic systems for the carriages.