In order to replace Britain’s ageing fleet of InterCity 125 trains and to invest in capacity and passenger journey improvements on the east coast and Great Western main lines, the Government began the InterCity express programme procurement in 2007. The programme’s key objective has been to achieve value for money across the lifetime of the trains, taking account of costs right across the rail industry.
Good progress has been made, including the announcement of Agility Trains as preferred bidder in February 2009. Over the course of the procurement, however, there has been a reduction in the capacity of the debt market to support the transaction as originally envisaged, and passenger growth has also slowed. In addition the Government and Network Rail have committed to electrify the Great Western main line from 2016. The Government have identified appropriate adjustments to the original programme to take account of these developments. This has inevitably extended the contractual negotiations, which are not yet complete and would not be so until mid-March at the earliest.
The negotiations are for a contract of nearly 30 years, a multi-billion pound spend over the course of many Parliaments. In all the circumstances, the Government do not believe it would be appropriate to enter into this particular contract in the immediate run-up to a general election. To ensure that a decision is taken at the beginning of the next Parliament on the basis of the fullest evaluation, the Secretary of State has today asked Sir Andrew Foster, former controller of the Audit Commission, to provide an independent assessment of the value for money of the programme and the credibility and the value for money of any alternatives which meet the programme’s objectives. It is critical for rail passengers that the right long-term decision is made about the next generation of intercity trains, which will have a life of 30 years or more.
The existing rolling stock dates back to the 1970s and needs to be replaced. 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.
Sir Andrew Foster will consult Agility Trains, the department, the relevant train operating companies, the Office of Rail Regulation, Network Rail, passenger groups and the devolved Scottish and Welsh Administrations.
Sir Andrew Foster will report within three months. The report and the Government’s response will be published and reported to Parliament. A copy of the letter from the Secretary of State to Sir Andrew Foster has been laid in the Libraries of the House.