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The Department for Transport (DfT) has been criticised by MPs over the procurement of new trains in the Thameslink rail upgrade project for over-running by three years.
The Public Accounts Committee (PAC) said it was “sceptical” of the £1.6 billion PFI deal to fund the new rolling stock, and questioned whether the DfT had “enough people with strong project management and commercial skills” to take the scheme forward.
Committee chairman and Labour MP Margaret Hodge said: “The planned completion date has been put back to 2018. But meeting the timetable for delivering the new trains will be very demanding and risky. We are also sceptical about using PFI to fund this project. It is alarming that the department compared the PFI option against only one other private sector option and did not construct a public sector comparator to understand better the relative costs, risks and rewards of choosing a PFI funding route over a public one. We intend to examine the contract that the department has recently awarded to Siemens and Cross London Trains.
“Another source of worry is the small size of the department’s core Thameslink team – just five people for a programme of this size and complexity,” Hodge continued. “We question whether the department has enough people with strong project management and commercial skills necessary to take forward its very ambitious portfolio of big projects.”
In a report on progress on the scheme, the PAC commended the DfT on the first phase of the project – £3.55 billion worth of improvements to the line and stations – but expressed concerns about the seven-year “management-style” contract it will award to run the service. This is because it is the first time the DfT has struck such a deal, which involves the operator being paid a management fee rather than being dependent on revenue from ticket sales, so it can “focus efforts on bringing new trains into service, rather than on growing passenger revenue”.
A DfT spokesman said: “Difficulties in the financial markets, caused in part by uncertainty regarding the Euro, alongside the complexity of the deal and our drive to secure maximum value for the taxpayer, did lead to a delay in concluding the rolling stock contract, but we remain confident that the trains will be delivered at the right time. Construction of the depots and manufacture of the new trains is on schedule.
“Taking on board the recommendations of the Brown Review, the new Thameslink Southern Great Northern franchise has been designed as a management contract with the delivery of the Thameslink programme at its core. This new approach will help to ensure the smooth delivery of the programme.”