COMMENT
Bombardier won the Southern order for 130 new carriages, but the next big challenge is Crossrail – where the financing arrangements look like they will be similar to Thameslink, which provided an in-built advantage to Siemens. RTM discusses procurement policy with Professor Karel Williams, an expert witness to the Transport Select Committee inquiry into rolling stock procurement.
P
rofessor Karel Williams, director of the Centre for Research on Socio-
Cultural Change (CRESC) at the University of Manchester, is an expert on industrial policy and financial innovation. CRESC’s report, ‘Knowing what to do: How not to build trains’, and Professor Williams’ sub- sequent oral evidence to the Transport Select Committee hearing on rolling stock procurement, put a lot of weight on the idea that the main reason Bombardier lost out to Siemens was because of its “in-built disadvantage” in financing, in that its par- ent company had a lower credit rating, and thus borrowing would cost more.
18 | rail technology magazine Dec/Jan 12
Although the terms of the contract remain private – at the insistence of both the DfT and Siemens, despite calls from the select committee to publish the reasons that Bombardier lost out and the difference in cost of the two bids – this idea has taken widespread hold, and was highlighted in the select committee’s report, published in December.RTM spoke to Professor Wil- liams at his Manchester office when the re- port was published.
He said: “The advantage of bundling to- gether manufacturing and financing for the DfT is that it gives them a single, simple,
unequivocal decision criteria. Several MPs at the select committee hearing pressed me on this, and my considered response is that having one decision principle, but two ma- jor policy objectives, is not a sensible way of proceeding. The one decision principle is the bottom line least cost, but there are two separate objectives: financing at the least possible cost, then the industrial policy criteria. You want train-building capac- ity in the UK, because you want the jobs, and want to limit the balance of payments deficit.
“You can’t actually have just one number
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