A worker walks past the entrance to the Bombardier plant in Derby, central England, July 5, 2011.DARREN STAPLES/Reuters
The United Kingdom's last remaining train-making facility has received a boost after Bombardier won a £189-million ($300-million Canadian) contract to supply carriages to rail operator Southern.
Bombardier was awarded the contract – partly funded by an £80-million government subsidy – to build 130 Electrostar carriages for Southern, bringing hope of a reprieve for more than 1,000 employees in Derby who are facing possible redundancy.
The plant became a political hot potato earlier this year when Germany's Siemens was selected as preferred bidder for the £1.6-billion Thameslink contract for 1,200 carriages, prompting Bombardier to review the Derby facility's future and warn almost half its 3,000 local staff to prepare for redundancy.
Although Bombardier declined to confirm the £188.8-million deal's impact on staff numbers in the factory, the contract provides some hope for both the train maker and the city.
"In the short term it will, I hope, secure the plant in Derby for at least 12 months or so," Chris Williamson, MP for North Derby, told the Financial Times. "This is a relatively small contract, and whilst it is welcome, it is no substitute for Thameslink or Crossrail."
Justine Greening, transport secretary, said: "This deal for more than 100 new carriages is great news for rail passengers and brilliant news for Bombardier and Derby", adding that the government would take "a broader look" at its procurement processes.
Paul Roberts, president of Bombardier's transportation unit, said the deal was the first step in a line of several contract wins that it was targeting for 2012, including the competition to supply trains for the £16-million Crossrail program.
"This is a significant project that emphasizes the performance of Bombardier's products in the U.K.," he said.
"We look forward to having greater clarity on procurement for the Crossrail project and welcome the transport select committee's recommendations that future tenders separate train financing decisions from train design and manufacturing."
The decision in June to select a factory in Germany to supply the rolling stock for one of the country's largest train orders sparked controversy, and earlier this month the government backed a call by MPs for the National Audit Office, the spending watchdog, to review the decision to award the Thameslink contract to Siemens.
Bombardier has been pressing for new work at its Derby plant before its final large contract, for London Underground, runs out in 2014.
Wednesday's deal will bolster Southern's fleet of Electrostar carriages and allow the train operator to extend its trains on its busiest routes into Victoria station.
Work on the new carriages will commence in the second half of next year, and will go into service from December 2013. Southern runs services in south London, Surrey, Sussex and Kent.
Julian Huppert, co-chair of the Liberal Democrat parliamentary party committee on transport, said: "This new, crucial contract for Bombardier is great news for Derby and a vote of confidence in U.K. manufacturing."