Siemens keeps €600m Eurostar order

[John Ashworth]

Siemens keeps €600m Eurostar order after Alstom legal challenge fails

High court rejects Alstom claim that tender process was 'ineffective'

* Dan Milmo
* guardian.co.uk, Thursday 14 July 2011 19.08 BST

Siemens will keep a €600m (£527m) train order from Eurostar after the high court rejected claims from French rival Alstom that the bidding contest was flawed.

The victory comes weeks after the German manufacturing group beat Bombardier's Derby factory to a £3bn contract for the Thameslink route, prompting political and trade union protests that the government was not doing enough to protect Britain's industrial base.

Eurostar, whose largest shareholder is the French national rail operator, has also found itself embroiled in a row over indigenous manufacturers in France. With implicit backing of the French government throughout the dispute, Alstom has argued that Eurostar in effect shifted the goalposts during the competition by awarding a contract to Siemens that contained substantial differences from the original tender.

The high court rejected that stance in a ruling this week. Justice Mann found there were no grounds for Alstom to claim that the tender was "ineffective", ending the French group's hopes that Eurostar would be forced to run the contest again. Alstom had also exceeded the time limit for bringing the claim, the high court found. "I therefore find that this ineffectiveness claim should be struck out."

An Alstom spokesperson admitted the contract award will not be overturned. However, the group said it will continue to pursue a multimillion pound compensation claim. "There are flaws in the way that Eurostar managed the tendering process and that is why we will continue to pursue our claim for damages."

Siemens has also survived a flurry of political and trade union lobbying over the contract for making 1,200 carriages for the Thameslink route. The transport secretary, Philip Hammond, discussed the Thameslink decision with a delegation from the TUC and rail unions this week but made clear that he could not strip Siemens of its status as preferred bidder.

Even if he wanted to, the Department for Transport would be over-ruled under European Union procurement rules, Hammond said. Bombardier said the Thameslink loss contributed to the announcement this month that it is cutting more than 1,400 jobs at its Derby plant.

Hammond and the business secretary, Vince Cable, wrote to the prime minister with concerns that other European nations appear to defend their manufacturing interests better during tender contests.

Steve Scrimshaw, head of Siemens' UK rolling stock division, said the Eurostar decision, and its award to a non-French company, underlined the fairness of EU procurement guidelines. "This shows that it was a fair and transparent procurement process and it shows that it was evaluated fairly."