More Than Politics: Bombardier Gets Crossrail Rolling Stock

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As had been widely anticipated for some time, this morning the winner of the Crossrail rolling stock and depot contract was announced. The (approximately) £1bn contract covers the supply of 65 nine car trains (which will officially be Class 345), the depot at Old Oak Common, and the ongoing maintenance of both. The winning bidder, it has now been confirmed, is Bombardier, who have similarly confirmed that the new trains will be manufactured and assembled at their works in Derby.

Breathing Out

The announcement will likely have yielded sighs of relief in various press offices across the Capital – most notably those of the DfT, TfL and the Mayor (Crossrail’s own press office likely being smart enough to point journalists towards the “project sponsors” should the contractee have been a less popular choice). This is because the award of the Thameslink rolling stock contract to Siemens back in June 2011 had provoked ululation from various political and media circles about British trains being manufactured by a foreign firm.

Indeed Bombardier themselves were happy to add fuel to that particular political fire, emphasizing their “British” credentials thanks to their trainworks at Derby (and the potential damage a lack of new work there could do) whilst playing down, to those not inclined to look too deeply, the fact that the firm is ultimately Canadian and that Siemen’s Desiro, on paper at least, had proven superior across almost all categories of judgement. As we As we commented back in November 2012, all this meant that the Crossrail Rolling Stock tender was likely to receive far closer and more careful attention – both during the the assessment process and subsequent to the award – than arguably any other rolling stock contract in recent years.

Getting Political

In light of all the above, it is perhaps tempting to suggest that politics, rather than transport need, may have played a considerable role in Bombardier’s successful submission. Bombardier’s receipt of the contract will certainly have been the most politically attractive outcome and over the coming weeks we will no doubt see a succession of political figures, both local and national, claiming – or at least implying – that this represents a political victory of sorts. It is dangerous, however, to go too far down this line of thinking.

That politics played a part in the successful award is most certainly true, but the very fact that this award was going to come under considerably more attention after the Thameslink award – and delay and legal battle over it – meant that if anything the Crossrail contract was going to be more rigorously policed and by the book rather than less. Indeed several members of the LR team can boast bruises from having been practically rugby-tackled away from anyone even vaguely involved in the rolling stock bid evaluation by Crossrail over the last twelve months, helping to confirm that this is the case.

Don’t hate the player hate the game

Ultimately, the political influence on this award has in fact been relatively direct – for why influence the judgement when it is far simplier to change the game? The one area in which Bombardier’s Thameslink bid had clearly, and arguably unfairly, suffered in relation to Siemens’ was in the financing, where an onus on the supplier carrying the cost of any required lending meant that Siemens’ corporate structure enabled them to secure cheaper financing. As we highlighted back in 2012, this was something that was swiftly identified and deliberately negated before the Crossrail rolling stock contract was tendered:

this is a situation that has since largely been addressed when it comes to Crossrail. A £350m capital contribution to the contract cost from the DfT and TfL, and the fact that this contract will be the first to take place under the auspices of the Government’s new UK Guarantee scheme, mean that the private sector debt and equity requirement is much lower.

With the rules changed and any genuine bumps in the playing field leveled, Bombardier’s chances of success were thus already greater.

Withdrawal from service

Focusing on the politics of the award too much also arguably neglects a more direct reason for Bombardier’s success – Siemens themselves had withdrawn from the bidding process. It is easy to forget now that one of the reasons the Thameslink rolling stock contract was considered so noteworthy was because it was very much seen as a likely gateway to the Crossrail work beyond as well. The two requirements were incredibly similar and indeed at one point there had been considerable argument as to whether the contracts should actually be tendered jointly, although ultimately the logistics rendered this impossible. Even without an official combination of the two tenders, the experience, supply and manufacturing synergies that a successful Thameslink bidder was likely to gain were assumed to make their potential Crossrail bid both cheaper and more attractive.

A contributing element to that withdrawal was likely political, as the drawn-out Thameslink process can hardly have enamoured Siemens to the current British market. Nonetheless the firm themselves have always insisted their withdrawal was as much due to capacity issues than anything else. Whatever the reasoning, the simple fact is that their exit from the Crossrail bidding process was always going to be a huge boost to the remaining bidders.

Learning from failure

As was the case with Thameslink, and as is the case now, ultimately the tender process had one clear objective – to find the best train at the best price. Here, failure can be as good a teacher as success. Bombardier failed to win the Thameslink contract and found themselves with lessons of supply and construction to learn after problems with both the S-Stock and Overground 378s previously ordered by TfL. Given the impact that a failure to secure the Crossrail bid would have had on Bombardier’s continued presence in the UK market, it would be foolish to assume that the firm had not gone to considerable lengths to learn from all the above before submitting their bid.

The sound of inevitibilty?

These then, collectively, are likely the key reasons for Bombardier’s success. That politics played a part is no doubt true, but almost certainly not through the discussions of powerful men in (now) smoke-free rooms, or through the influence of particular political figures (whatever they might claim). The truth is, in fact, far more prosaic – with the game rebalanced, and with Siemens (the pre-race bookies’ favourite for the contract) having put themselves out of the running, the Crossrail contract was arguably Bombardier’s to lose rather than to win. Taking this line of reasoning too far, however, should also be avoided. Bombardier are a manufacturer with considerable experience, both of success and of failure. Having failed to secure the Thameslink contract, their bid team no doubt put considerable effort into determining the flaws in their approach and correcting them. Assuming otherwise would be to do them a disservice.

Ultimately then, just as Siemens were the right manufacturer at the right time for Thameslink, it thus appears that Bombardier can say the same thing when it comes to Crossrail.

That politicians and press officers will likely sleep better tonight as a result of that fact is most certainly true. That their interests were likely the primary overriding reason why this is the case, however, is almost certainly not.

Written by John Bull