There appears to be many anecdotal references in this post not backed up by any hard evidence.

Whilst you point to Siemens credit rating as the apparent major factor of the thameslink contract award, you have failed, albeit like every news agency that reports on this, to highlight the issues of build quality and reliability with Bombardier trains which in my opinion is far more pertinent.

As someone who travels on Bombardiers trains frequently and has a father-in-law who has just started driving them, I have to inform you of the reliability issues that are all too frequent with all Bombardier trains.

Firstly, the S stock delivery for the metropolitain line has been temporarily suspended due to reliability issues. The new 172s for london midland are also having major electrical problems since delivery. Similarly there were problems with the 170s delivered to london overground and the electrostar variants cannot work with each other despite being of the same class.

Bombardier air conditioning is also of sub-standard quality. There are only 3 settings yet the new siemens trains have state_of_the_art climate control that responds to the amount of people on the train, a common complaint on the thameslink route. Many people get to the point of passing out due to the heat in the coaches yet nothing changes in terms of design.

There needs to be balance in the reporting of Bombardier stories (canadian co based in germany) and surely being a brum based blog, you would have lamented the closure of the alstom plant that built the first batch of pendolinos?

Please get some balance and give the superior product a chance. Alstom and siemens products are streets ahead of bombardier and its about time that this jingoistic political hogwash stops. Why not read into bombardiers track record at other train factories?

Professor David Bailey’s article repeats 2 big falsehoods that are gaining credibility through being repeated and endorsed by people who should know better. These are then not being challenged by politicians, participants or industry insiders for reasons of political expediency, fear of causing offence or of facing dismissal. It is time to jump off the bandwagon and face reality.

Firstly it may be true that the Thameslink deal prompted Bombardier to announce 1400 job losses. It is, however, disingenuous, if politically convenient, to imply the loss of the deal caused the job losses. They were going to be announced anyway.

Secondly it is wrong that Siemens credit rating was a key factor in Bombardier losing the contract. Whilst insiders cannot speak openly and the actual bids are commercially confidential, the answers are available in the murky world of the internet. Bombardier apparently lost on both the engineering and the financial evaluations.

Commentary on the credit rating has been bedevilled by weak or politically driven reports building on the firm foundation of other weak reports.

Professor Bailey says: “The select committee was informed by experts (notably a team coordinated by Manchester University - see below) that Siemens's better credit rating was a key factor in securing preferred bidder status for Thameslink as against Bombardier.”
The select committee’s very unimpressive report (link in main article) says “It is hard to escape the conclusion that Siemens' A+ credit rating made a significant contribution to its success in winning the Thameslink procurement.” In fact the evidence they received and summarised at paras 25-28 does not support that conclusion (and excuse me if I discount the evidence from the local MPs!). It is worth having a look at how misreported facts have been given a gloss of credibility.

The committee reports: “Professor Karel Williams of the Centre for Research on Socio-Cultural Change suggested that the difference in the credit ratings of the two firms could have been worth "anything like £500 million"”(para 27). The oral minutes give the support:
Q11 Chair : Professor Williams, you cite Siemens’ higher credit rating as one of the reasons they got the contract. Is that something you can be firm about?
Professor Williams: I have not seen figures on which the DfT has made the decision, nor has anybody else had sight of them. All I have is an envelope and that tells me that Bombardier has a B++ credit rating and Siemens an A+ credit rating. You can then play around with rates of interest and various other things, and on the back of my envelope it looks like it could be anything like £500 million.

“No” would have been a simpler answer. So let’s look at Professor Williams report (link in main article). Readers can form their own view, but to me this is not an academic report but a political polemic. Indeed, a rant in places. On page 5 the source is given as “When the Daily Telegraph (7th July 2011) raised this issue with “investment bankers familiar with deals similar to Thameslink”, their estimate was that lower cost of finance gave Siemens a financing cost advantage of £700 million over 30 years”. This is it: http://www.telegraph.co.uk/finance/newsbysector/transport/8621498/Bombardier-had-little-chance-on-Thameslink-because-of-contract-terms.html.

So a journalist asks a non-insider city contact a misconceived question and it is reported in a newspaper. It is then laundered to respectability by an “academic” report and quoted, less a margin for error to a politically driven committee. The article further reinforces this myth. It is politically convenient rubbish.

Siemens credit rating does not give a 3o year benefit. They are not a leasing company and will not fund it for 30 years. Once the rolling stock is delivered such that contractual delay risk is eliminated and once initial teething problems are eliminated, the funding would be syndicated. By that time debt markets should have stabilised.

Siemens’ credit rating does, however, matter in at least 4 other ways:
• Executability – Siemens can sign now and sort the finance later. Bombardier need financing commitments now.
• Bombardier need a bigger profit margin on the manufacturing because they have a higher cost of capital.
• Bombardier’s poor credit rating will be reflected in the higher purchase price of every component from every subcontractor. It would cost Bombardier more to build the same train as Siemens. They can try and manage that by building a lesser quality train.
• Warranty and product support over a 30 year life. (See Angel trains written evidence)

The criticisms of the way the contract was let (design, build, finance, maintain) are, to some extent attempts to escape the consequences of the above. The second and third are, however, inescapable. The first can be managed, to some extent, where the Train Operating Company will maintain (as with Southern) but it is unclear it is universally good practice.

The bundled contract was a Dft/Labour ploy to escape the clutches of the Rolling Stock leasing companies with whom they have battled and royally lost. However, bundling maintenance into the lease does ensure that the bidder has to price the future cost. Less well built trains, trains built to a price, or built by manufacturers with poor reliability record are likely to have a higher future maintenance cost and this is exposed to immediate scrutiny and not hidden away to be borne by the next franchisee.

Bombardier lost in a fair competition. Let us face reality. It is grim.

The reality is that no one in their right mind would have a train assembly plant in the UK. Why would you? Our trains are narrower and lower than those in the rest of Europe. Quite simply you can build and test trains for the UK market in Europe but you cannot assemble trains for the European market in the UK. Imagine it, every single coach made in the UK has to be lorried to Europe and arrangements made for testing, rectification and commissioning. I cannot even think of the last time that was done.
Train manufacturers are multinationals. They need to be. Why would any multinational locate an assembly plant in the UK? Assembly at Derby may well be doomed. Bombardier may wish to keep a design office in Derby but unless they show quality leadership they will not be able to attract and retain the staff. If the UK is an outpost of the empire why work there? Grim.

As was pointed out to the Select Committee, EU law prohibits favouring any bidder on the basis of their nationality. It also prohibits state aid except for Small and Medium Sized Enterprises. Such SMEs are not a major feature of a pan-European rolling stock manufacturer looking for certainty of component supply and long life aftersales support. Indeed Bombardier blamed component manufacturers insolvencies for the late delivery of trains in 2009.

So there really is little mileage in applying wishy washy socio-economic factors in evaluating bids to push work to the UK.
In any event, I do agree that without the wider industrial base, pushing contracts the way of Bombardier is merely pushing value to the non-UK subcontractors. You could have an inferior product, at a higher cost and create employment abroad. Great.

If, for the reasons above, a Bombardier assembly plant in the UK is not viable then the Hitachi promises of a plant in the North East to assemble new high speed trains looks somewhat hollow. That is a much bigger procurement scandal. We really are going to be buying an unsuitable train, that will cost too much, whilst creating employment abroad.