Full steam ahead: George Osborne hails opening of Hitachi’s £82m rail plant

Full steam ahead: George Osborne hails opening of Hitachi’s £82m rail plant .A new train factory has been opened in north-east England by Hitachi, and heralded by the prime minister and chancellor as a further boost for their plans for a “northern powerhouse”.

The new £82m facility in Newton Aycliffe, Co Durham, will build pioneering – if controversial and expensive – intercity trains and will employ around 730 people when its production lines are up and running next year.

David Cameron said that the plant, the result of a £5.7bn contract from the government to Hitachi to supply its InterCity Express Programme (IEP) trains, was a “show of confidence in the strength of the British economy” .

The chancellor, George Osborne, who had earlier visited a nearby Nissan plant as the car manufacturer announced further investment in Sunderland, said: “This state-of-the-art facility will grow and secure jobs for decades to come, and will help us to build the northern powerhouse, while at the same time revitalising one of our oldest industries in the region.”

The plant is connected directly to the branch line where Robert Stephenson’s first passenger train service ran, 190 years ago. Hitachi’s chief executive, Hiroaki Nakanishi, said: “We have brought train design and manufacturing back home to its birthplace in the north-east.”

Questions of heritage are not merely sentimental, as controversy has dogged train procurement deals of recent years. Hitachi and its partners beat Bombardier and Siemens to be named preferred bidders for the IEP in 2009, and the government faced a furious backlash as it emerged that the first trains would be built entirely in Japan and the new factory would be primarily an assembly plant.

A scathing inquiry a year later put the programme in doubt, before the government confirmed a scaled-down order in 2011. When Bombardier – a Canadian-owned company, but with a long-established train factory in Derby – was also overlooked for the Thameslink trains contract, it seemed an ominous warning for train manufacturing in the UK.

Instead, England now has two big plants and a prospering supply chain. The factory, now a gleaming shell the size of three football pitches with a kilometre of outdoor test track, took 20 months to build and has enough solar panels on its roof to supply a megawatt of energy when the sun shines on the north-east.

The 112 IEP trains made there will replace old rolling stock on the Virgin Trains East Coast and First Great Western franchises with bigger, more comfortable carriages, adding around a third more seats on their peak services into the capital. But the train order – particularly its financing – has been fiercely criticised. Rail expert Christian Wolmar says it was “the worst train deal in history – they are way overpriced.”

The trains’ distinctive feature is the ability to run on electricity or diesel – an idea dreamt up by the Department for Transport (DfT) to allow direct journeys to the furthest, non-electrified stretches of the East Coast or First Great Western mainlines. But Wolmar calls this “the most ridiculously complicated way of doing it: you’re carrying round an extra engine. Why not swap the locos – or just get the few passengers who want to go to Inverness to change trains?”

Karen Boswell, managing director of Hitachi Rail Europe, disagrees: “The ‘bimode’ is a really smart design.” In test runs, she says, “I challenge people to know what mode it’s in, the change is so smooth.” Boswell, former MD of East Coast until the train company was reprivatised, said passengers would benefit: “My firsthand experience was, when you’ve got high winds and wires, you need extra trains that can switch from diesel to electric to give you that flexibility.”

The capability looks more useful after problems with electrification at Network Rail, which could leave more services than anticipated requiring diesel power. But Roger Ford, industry editor of Modern Railways magazine, says: “The bimode wasn’t designed to thrash down main lines on diesel. It hasn’t really got the performance. If Great Western electrification is late by two years, it won’t really hack it.” That could mean planned services won’t operate, as well as additional cost for the taxpayers and farepayers who will ultimately foot the bill.

The already hefty £5.7bn bill includes aftercare, with Hitachi employing 700 staff at a number of new depots along both mainlines to maintain and service the IEP trains. Ford says that the contract has “lumbered us with huge costs. It’s a 27-and-a-half year deal – it’s twice the cost of a lease train.”

Both Wolmar and Ford express some scepticism about the scope of the new Hitachi factory, which they describe as an assembly plant. But Boswell flatly rejects the label: “It’s a manufacturing plant. There is the best of localisation and globalisation”.

The train shells are made in Japan, using a patented technique used by Hitachi to build the Shinkansen bullet trains. But Boswell and the DfT flag up the UK input: even on the first, Japanese-built IEP train, which arrived from Kasado via boat to Southampton in March, there were components from 30 UK suppliers.

The plant will also produce 63 commuter trains for Scotrail services around Edinburgh and Glasgow, and Boswell says there are enough train orders coming down the line to keep the 730 employees in their jobs – not least, potentially, HS2.

The chief executive of Hitachi Rail Europe, Alistair Dormer, has said the plant will be the “engine room for driving our future growth across the UK and into Europe.”

Wolmar remains sceptical: “Let’s not think that it’s going to be the bedrock of a massive renewal of British train manufacturing, because it isn’t. It is a useful facility and will hopefully generate some very nice trains.”

But the new plant remains one of the biggest statements of industrial intent in the north-east since Hitachi’s automotive compatriots Nissan set up shop three decades ago. And Nissan also announced on Thursday that it would be building the next generation of its Juke car in Sunderland. It said the £100m investment would help secure 34,000 jobs at the plant and in the UK supply chain into the next decade.

The chancellor, who was in Sunderland to welcome that news, will hope for a similar future for Newton Aycliffe, where Nakanishi promised: “It’s our culture as a business to take a long-term view view in everything we do. Hitachi is here to stay.”

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