January 20, 2017 / 12:01 AM / in a year

Britain seeks bids for $3.4 billion high speed train contract

LONDON, Jan 20 (Reuters) - Britain opened the bidding on Friday for a 2.75 billion pound ($3.4 billion) contract to build a fleet of trains for a new high speed railway project to link London with the north of England, work on which is due to begin this year.

The government was looking to order up to 60 trains, which could each seat over 1,000 passengers and travel at around 225 miles per hour, and planned to award the contract in 2019, Transport Minister Chris Grayling said.

“We have held discussions with UK suppliers to make sure they are in the best possible position to win contracts,” Grayling said in a statement.

Britain’s 56 billion pound High Speed 2 railway will connect London to cities in the country’s central and northern regions, with a first phase planned to open in 2026 and a second by 2033.

The first phase of the project, which has divided opinion in Britain because of its rising costs and the potential impact on the countryside and local communities, is due to get final approval shortly, the Department for Transport (DfT) said.

Calling it Europe’s largest infrastructure project, the DfT said construction would start this spring, with building creating 25,000 jobs, helping to stimulate Britain’s economy when it faces uncertainty and possible job losses as the country withdraws from the EU over the next two years.

The contract up for grabs on the HS2 trains would cover the design, building and maintenance of the fleet, said the DfT.

Train supply deals in Britain have been politically sensitive in the past, with a 2011 contract awarded to Germany’s Siemens resulting in hundreds of job losses in Britain.

But UK-based train factories have been boosted since.

In 2013, Britain awarded Hitachi a 1.2 billion pound order for trains to be built at a factory in County Durham, north east England.

The following year, it handed a 1 billion pound contract to Canadian-owned Bombardier, securing jobs at a factory in Derby, northern England. Bombardier also won another 1 billion pound contract in August 2016.

The DfT said that Friday marked the indicative notice which gave potential bidders advance warning of the formal start of the process this spring. ($1 = 0.8133 pounds) (Reporting by Sarah Young; Editing by Keith Weir)

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