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Crossrail bidders asked what benefits they will bring to the UK economy

Out-Law News | 29 Feb 2012 | 12:55 pm | 2 min. read

The company which will provide rolling stock and the depot for London's new Crossrail line will be required to demonstrate how its plans will benefit the UK economy as part of the procurement process, the Government has announced.

The tender documents for the project, worth an estimated £1 billion, include a 'responsible procurement' element which asks bidders to set out what opportunities they will provide for training, apprenticeships and local businesses as part of the work. The successful company will also have to establish an "appropriate local presence" to manage the delivery of the project.

Transport Secretary Justine Greening said that the requirements reflected "a number of outcomes" from the Government's review of public procurement, and that the contract could bring "opportunities" to UK businesses.

In a written ministerial statement, she said that she was "keen to understand and communicate the benefit" that the Crossrail contract will bring to the UK economy, along with project co-sponsor the Mayor of London.

"Bidders and being asked, in the Invitation to Negotiate, to specify from where each element of the contract will be sourced," she said.

She stressed that any such information would not contribute to the decision-making process, however added that a successful bidder will have to report against any estimates provided. Under EU roles, member states cannot show domestic bias when awarding government-funded contracts; however they can consider social and environmental considerations as well as price.

Four companies have been invited to bid for the contract, which will be awarded in spring 2014. These are Bombardier, Construcciones y Auxiliar de Ferrocarriles, Hitachi and Siemens.

The tender is for the design, manufacture, finance and servicing of around 60 new trains, which will operate on the existing UK rail network from May 2017 before being put into service on a new east to west deroute across London. The successful bidder will also be responsible for the construction of a new depot at Old Oak Common in west London. The Crossrail route, which runs between Heathrow in the West and Canary Wharf in the east via new tunnels under central London, will open in 2019 and serve around 200 million passengers each year.

The Chancellor of the Exchequer included a package of measures to reform public procurement processes as part of his Autumn Statement in November. The reforms followed the decision to award a contract for 1,200 carriages for another cross-London route, Thameslink, to Germany's Siemens instead of Bombardier. The Canadian company behind the UK's last train-making facility, in Derby, laid off nearly half of its 3,000 staff after losing the bid.

Crossrail chief executive Andrew Wolstenholme said that the project would create a "significant transformation" of transport in the capital and across the south east of England.

"Over the past year Crossrail has successfully procured some of the largest value contracts in recent UK construction history – creating major employment opportunities and providing a much-needed boost to the UK economy. In doing so we have developed a reputation for being an industry leader in procurement built on a commitment to conduct our procurements in a fair, objective and transparent manner and in full compliance with the regulatory framework," he said.

The contract will involve a "significant element" of public investment alongside private finance, the Government said.

"This approach will help ease the cost of debt repayments to the public purse, as well as reduce bidders' requirements to raise debt and equity, while still transferring significant risk to the private sector ensuring that we secure value for money," Greening said in her statement.