Jobs at risk as £7bn trains deal put on hold until after election

PLANS to cut journey times from Yorkshire to London and createthousands of jobs are in jeopardy after the Government postponed a controversial deal to buy a new fleet of express trains.

Transport Secretary Lord Adonis said the 7.5bn contract for a fleet of Inter City trains – which was expected to be signed months ago – is now on hold until after the general election because it was

not "appropriate" to sign it before.

But he raised further doubt over whether the deal to overhaul the East Coast main line's ageing fleet – cutting journey times to the capital by ten minutes, seeing new depots built in Leeds and Doncaster and possibly creating a new factory in Sheffield – will ever go ahead by ordering an assessment of whether the project represents value for money.

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With public spending under intense pressure, the announcement raises the prospect it could fall victim to Government spending cuts.

The scheme has been controversial since it emerged that part of the work would be done abroad after a consortium including Japanese manufacturing giant Hitachi – which would build the trains in its own country – was given preferred bidder status over a rival bid

including British train-builder Bombardier.

Shadow Transport Secretary Theresa Villiers said: "With the most overcrowded trains under Labour running at over 170 per cent capacity, Lord Adonis has badly let down passengers by failing to keep his promises on additional capacity.

"This is the latest in a long line of incompetence and broken promises from Labour."

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The Government claimed the deal to replace existing 20- to 30-year-old Intercity trains would "create and safeguard" more than 12,500 jobs when they announced Agility Trains – a consortium also including John Laing and Barclays – as the preferred bidder for the deal last February, although critics warned most of those would be overseas.

The new "super express" trains would be used on the East Coast – linking London with Leeds, Hull and York – and Great Western main lines.

Some of the manufacturing work was expected to be done at a new UK factory at Sheffield, Gateshead or in Leicestershire, eventually employing 500 people, while new depots were due to be built in Doncaster and Leeds.

But yesterday Lord Adonis said that although "good progress" had been made since the programme began in 2007, the banking crisis, passenger numbers and plans to electrify the Great Western main line had put the project back.

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"In all the circumstances, the Government does not believe it would be appropriate to enter into this particular contract in the immediate run up to a general election," he said.

He has asked former Audit Commission controller Sir Andrew Foster to assess whether the scheme is still value for money "to ensure that a decision is taken at the beginning of the next Parliament on the basis of the fullest evaluation".

He added: "If Sir Andrew Foster reaffirms that the Intercity Express Programme is better than the alternatives, the Secretary of State's intention would be to proceed with the project in the next Parliament, subject to satisfactory resolution of all the contractual issues."

But Angela Smith, MP for Sheffield Hillsborough, said she was concerned about the delay and would seek assurances from Lord Adonis.

Agility Trains said it was disappointed but would continue planning for the programme.