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Railhub Archive
2009-03-05 DfT-002
Department for Transport


Delivery of new trains to be speeded up by new company

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Department for Transport

Delivery of new trains to be speeded up by new company

5 Mar 2009 10:05
source Department for Transport
type Press release

note DEPARTMENT FOR TRANSPORT News Release (032) issued by COI News Distribution Service. 5 March 2009

Passengers on some of the country's busiest rail lines could see improvements arrive more quickly after Transport Minister Andrew Adonis announced that his Department had set up a new company to oversee the procurement of 202 new diesel train carriages.

The company, Diesel Trains Limited, has been set up as part of the Chancellor's pre-budget review, announced in November 2008, which will see an extra £1bn dedicated to accelerating major transport projects.

This includes around £300m for an additional 202 train carriages which are due to relieve overcrowding in the Thames Valley, around Bristol and on longer distances in northern England. The trains are set to enter service by 2012 subject to negotiations with train operators First Great Western, Trans-Pennine Express and Northern Rail.

Transport Minister Andrew Adonis said:

"This is the most effective way to buy new trains quickly and for the benefit of passengers. This new company is an illustration of the Government's commitment to reducing crowding for rail passengers.

"This is a milestone in the delivery of new carriages which will help to increase rail capacity on some of our busiest routes. I'm delighted we have reached such an important stage and that passengers will see the benefits within a relatively short period of time."

In letters to industry partners the DfT makes clear that it does not intend to be a long-term owner of trains and the new company is not intended to compete with other rolling stock leasing companies.

To ensure this is the case the Department will invite the market to bid either for the company or for the assets and related contracts within it, and to take on the ownership and leasing of the trains.

Notes to editors:

1. A successful bidder to build the new train carriages (known as Diesel Multiple Units or DMUs) is expected to be announced in April.

2. The DfT is currently negotiating with other train operators for the purchase of 120 new carriages, in addition to these DMUs, and, over the next 12 months, would expect to see orders for a further 250 carriages. By the end of next year, orders for over 1,000 new carriages are likely to have been placed.

3. It is currently anticipated that the following contracts will be put into place so as to enable the train building to begin as quickly as possible:

* Three tripartite Manufacturing and Supply Agreements between Diesel Trains Limited, the Manufacturer and each of the TOCs;

* Three bipartite Technical Support and Spares Supply Agreements between the Spares Supplier and each of the TOCs;

* Three bipartite Rolling Stock Leases between Diesel Trains Limited and each of the TOCs; and

* A single overarching Umbrella Deed signed by Diesel Trains Limited, the Manufacturer, the Spares Supplier and the three TOCs.

4. The Government intends to ensure that DMU rental reflects a fair market rate. Rental will be considered independently of the DfT in due course by an independent expert. In reaching their view, the independent expert will have regard to competitive market levels and will work to a publicly-available remit which will have been consulted upon in advance by DfT. The independent expert's analysis and conclusions will be published by DfT.

5. To safeguard the Government's investment in Diesel Trains Limited, DfT will be setting a "reserve price" based on the net costs of Diesel Trains Limited up to that point. Diesel Trains Limited (or the assets and related contracts within it) will be sold to the financier offering the highest compliant bid above the reserve price. Should no bidder come forward with such an offer, Diesel Trains Limited (or the assets and related contracts) will remain in Government ownership for the time being.

6. The Government's commitment to increasing capacity on the rail network from 2009 to 2014 was set out in the July 2007 Rail White Paper. It is likely to require 1,300 additional carriages. This was described in the DfT Rolling Stock Plan published in January 2008.

Public Enquiries: 020 7944 8300
Department for Transport Website:

Railhub Archive ::: 2009-03-05 DfT-002


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