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Who Will Win HS2 Contracts?

As a sub-contractor to the Rail sector we have been watching with great interest as a number of firms have been circling the contracts to build the next generation of high speed trains. But who will win? We take a look at the different finalists to evaluate their current infrastructure, potential impact and perceived knowledge.

Bombardier

Bombardier certainly have the longest legacy of any Rolling Stock on this list, buying out Adtranz in 2001 and in doing so acquiring some key infrastructure in the industry. Their Litchurch Lane factory is the UK’s longest standing and their Derby site was originally established back in 1876. Over the years they have held a whole range of contracts, and by many measurements are the largest train manufacturer worldwide.

You would think this would make them an obvious choice for something like HS2, but value for money has been a clear issue in contract bids. As recently as 2011 there were protests as 1400 Bombardier employees in Derby were at risk of losing their jobs if a contract went to Germany’s Siemens, something you wouldn’t imagine would happen if the company were delivering great value for money.

In terms of infrastructure and impact, although Bombardier owns two major factories in the UK, they did have to shut down several facilities in 2004 when there was an oversupply of Rolling Stock (something you would imagine may be in danger of happening again) and they have by and large stayed the same size over the last decade. Would HS2 contracts create more jobs or secure those already in place? At the moment it seems more likely that Bombardier might team up with another company on this list with rumours of a merger with both Siemens and Hitatchi.

Hitatchi

Hitatchi have a long history in Japan and have certainly had a footprint in the UK for the last 10 years, although noticeably since the announcement of HS2 this has stepped up a gear. They opened a new manufacturing facility in Newton Aycliffe in 2015 and have several maintenance depots around the UK. Hitatchi have had criticism in the past that their UK operations are purely assembly and that many of the parts are still actually made in Japan.

Hitatchi do have good standing when it comes to High Speed rail projects, they delivered the Class 395 train, the UK’s first high speed passenger train, back in 2009. I would think that in terms of technology Hitatchi certainly have the skills to deliver the projects, but perhaps they will need to reassure the contract holders that more parts will be made in Britain and that there will be a trickle down to UK sub-contractors. Hitatchi’s website says they have created 730 new jobs by opening their new site and you would imagine that HS2 would be about consolidating those roles.

Alstrom

Alstrom are relatively new to the UK sector, although they are a global rolling stock manufacturer many of their first contracts in the UK were on railways and infrastructure including the HS1 London to Paris line. Alstrom have won some major contracts in the UK recently including Virgin’s West Coast Main Line and the servicing of London Underground Trains on the Northern Line. As Recently as June they opened a new “Train Modernisation” centre in Widnes which will undertake a number of painting, refurbishment and assembly jobs. Currently Alstom could be considered a competitor to firms such as Unipart Rail and their focus is much more on the refurbishment of Rolling Stock rather than creation of new vehicles.

Considering how new their facility in Widnes is, it may be a case of waiting and seeing what sort of impact Alstrom will have, currently their website says 130 new jobs have been created and we have seen Alstrom reaching out to the UK sub-contract base. Certainly Alstrom look like a company with the potential to grow and take on a projects like HS2, and certainly I could see many new jobs being created should they win the contract. The big news came out in September that Alstrom have merged with Siemens in their Europe.

Siemens

Siemens are an interesting one. Largely their operations in the UK are connected with automation, electrification and signalling. Their Rolling Stock is still produced in Germany and Spain and they often work alongside CAF for their interiors. Compared to other companies on this list, Siemens don’t have the same levels of infrastructure but certainly have been winning contracts in the UK for some time. What we see from them that is quite interesting is their willingness to partner with other companies, and as above have recently merged with Alstrom for their European operations, whether or not this will be reflected in a joint HS2 bid remains to be seen.

Talgo

Talgo are Spanish Rolling Stock Manufacturers and I don’t think it would be unfair to call them the outsiders for the HS2 contract. They don’t have much in the way of history or infrastructure in the UK at the moment and have only just begun to sell into our market. Interestingly they have announced recently that they plan on developing a UK factory and company President Carlos de Palacio mad e a point of saying that any trains would be fully manufactured in the UK and would incorporate a UK supply chain, although this is music to our ears, one does wonder if this would still go ahead should the company be knocked out of bidding. Talgo might just be a little too late in the game to win HS2 but certainly a lack of infrastructure would mean the creation of a lot of new jobs.

With mergers and deals being done it will be interesting to see who comes out on top on the race to build the next generation of High Speed Rolling Stock. Bronte Precision are sub-contract manufacturers who make a wide variety of components for new and legacy rolling stock vehicles.