Hitachi's intercity train deal finally leaves the sidings

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Transport Secretary Philip Hammond gave the green light to the threatened Intercity Express Programme (IEP) yesterday, signalling a resumption of one of Britain's largest-ever train orders.

The 882-carriage deal with the Agility Trains consortium led by Hitachi was put on ice last summer after a review questioned the "wisdom and practicality" of the scheme, particularly in the light of the squeeze on the public finances.

Hints from the company yesterday suggested a compromise over price. "Since the Preferred Bidder announcement in February 2009, Agility Trains has worked very hard to improve value for money in response to the UK's public financial position and has passed on 100 per cent of all value for money benefits to the UK Government," the consortium said.

The investment will create 500 British jobs. And the Business Secretary, Vince Cable, yesterday confirmed that the Government will offer "conditional funding" in support of plans for a factory in the North-east.