The European Commission (EC) has ruled that the UK government would face no censure if it decided to re-tender the £1.4 billion (€1.6 billion; $2.2 billion) Private Finance Initiative (PFI) contract to build train carriages for the new Thameslink train route.
The ruling came in response to a letter from Glenis Willmott, a Labour Member of the European Parliament, asking whether the UK government would face punitive action if it went back on the decision to award preferred bidder status to a consortium led by Germany’s Siemens – which also included fund managers 3i Infrastructure and Innisfree – in June this year.
According to the BBC, the EC’s written reply said: “EU public procurement legislation allows contracting authorities to choose the best offer in the context of a tendering procedure, as long as their decisions are taken on a transparent and non-discriminatory basis.
“In this context, the EU public procurement rules do not prevent a contracting authority from re-launching the tendering procedure for the award of a contract.”
All this is likely to be a technicality, however, since the governing coalition’s Justine Greening – who took over as transport secretary last month – swiftly confirmed that she would not be re-visiting the Thameslink procurement decision, which happened on the watch of her predecessor, Philip Hammond.
The victory of the Siemens consortium was opposed by opposition politicians and unions as it was followed by the announcement that Canadian train maker Bombardier – which headed a rival, losing bid – would be shedding 1,400 jobs at its factory in Derby, in England’s East Midlands.
The controversy led to an ongoing review of EU procurement rules by the UK government. Hammond previously stated: “It is clear that it is possible to structure the contracts such that, even within the constraints of the European procurement directive…there are much greater chances of the domestic supply chain succeeding. I think we need to look at how we manage these things in the UK in the future.”
However, the government has been against reviewing the Thameslink decision due to the prospect that it would delay the project by several years as well as exposing it to possible legal action from Siemens.