Intercity trains upgrade postponed

Plans to replace the ageing fleet of intercity trains have been postponed, Transport Secretary Lord Adonis announced today.

He said the multi-billion pound, 30-year intercity express procurement programme had run into difficulties.

Lord Adonis said he thought it was not appropriate to enter into the contract in the immediate run-up to a general selection and he had ordered an independent assessment of the value for money of the intercity programme.

All being well, there were plans to proceed with the project in the next Parliament "subject to satisfactory resolution of all the contractual issues".

In order to replace Britain's fleet of Intercity 125 trains and to invest in capacity and passenger journey improvements on the East Coast and Great Western main lines, the Government began the Intercity Express Programme procurement in 2007.

Lord Adonis said that good progress had been made, including the announcement of Agility Trains as preferred bidder in February 2009.

He went on: "Over the course of the procurement, however, there has been a reduction in the capacity of the debt market to support the transaction as originally envisaged, and passenger growth has also slowed.

"In addition the Government and Network Rail have committed to electrify the Great Western Main Line from 2016. The Government has identified appropriate adjustments to the original programme to take account of these developments.

"This has inevitably extended the contractual negotiations, which are not yet complete and would not be so until mid-March at the earliest."

Lord Adonis continued: "The negotiations are for a contract of nearly 30 years, a multi-billion pound spend over the course of many Parliaments.

"In all the circumstances, the Government does not believe it would be appropriate to enter into this particular contract in the immediate run up to a general election.

"To ensure that a decision is taken at the beginning of the next Parliament on the basis of the fullest evaluation, I have today asked Sir Andrew Foster, former controller of the Audit Commission, to provide an independent assessment of the value for money of the programme and the credibility and the value for money of any alternatives which meet the programme's objectives."

He added: "It is critical for rail passengers that the right long-term decision is made about the next generation of inter-city trains, which will have a life of 30 years or more.

"The existing rolling stock dates back to the 1970s and needs to be replaced. If Sir Andrew reaffirms that the intercity express programme is better than the alternatives, my intention would be to proceed with the project in the next Parliament, subject to satisfactory resolution of all the contractual issues."

Lord Adonis said Sir Andrew would report within three months.

Agility Trains said: "Since designation as preferred bidder in February 2009, we have been working hard to meet the Government's requirements for the intercity express programme.

"We are disappointed that a contract will not be concluded before the UK general election.

"However, we will continue our ambitious planning for production and maintenance facilities in the UK to support the programme, in anticipation of concluding the contract under the next Parliament."