Hitachi and Alstom win 300 billion yen contract for UK HS2 line

Hitachi Ltd. of Japan and its French partner Alstom SA have been awarded a £ 2 billion (300 billion yen) contract to supply a fleet of 225 mph electric trains for the new high-speed railway British HS2.

The consortium, formed by Hitachi and the former Bombardier Transport business acquired by Alstom in January, will build 54 trains for the first section of track connecting London Euston station to Birmingham in central England, according to a statement Thursday from HS2. Ltd.

The mega-order will support or create thousands of jobs and boost Britain’s two main railway factories, the historic Litchurch Lane factory in Derby, central England, now managed by Alstom, and the new Newton Aycliffe’s Hitachi plant in the northeast. The production of the 200-meter-long trains, which will double in formations of 16 cars carrying more than 1,000 passengers, will begin in 2025.

HS2 suffered a heavy blow last month when the government of British Prime Minister Boris Johnson abandoned most of a planned extension to east of Leeds in Yorkshire as the cost of the world’s largest infrastructure project Europe was over £ 100 billion. At the same time, he confirmed that trains will start running from 2029 on the West Arm, which will continue north to Manchester.

“This is another historic milestone in the delivery of the HS2,” UK Transport Secretary Grant Shapps said in the statement. “Today’s announcement places Britain firmly at the forefront of the high-speed rail revolution.”

Hitachi Rail CEO Andrew Barr said the new trains will usher in ‘the next generation’ of express travel in the UK, ‘adding to the small fleet of Javelin models – based on its shinkansen high-speed train – which provides local services on the HS1 line between London and the Channel Tunnel.

Alstom was in the running to win the entire order, as the French company had touted a variant of its own family of TGV trains for the contract.

While the company’s 50:50 returns with Hitachi may be less lucrative, the deal lends a boost to investor concerns after Alstom set aside € 1bn ($ 1.1bn dollars) for problematic contracts inherited from the purchase of Bombardier Transportation from its Canadian parent company.

Assembly and initial equipping of the 432 bodies will be carried out at the Hitachi plant in Newton Aycliffe, before the trains are moved to Alstom’s site in Derby for completion and testing.

The wheel units will come from the French company’s factory in Crewe, with the project directly supporting more than 500 jobs and around 2,000 in the broader supply chain. Maintenance will be carried out at another Alstom plant in Birmingham under a 12-year contract.

While the winning design is an evolution of the ETR 1000 that Hitachi and Bombardier built for the Italian Trenitalia – which will run trains on HS2 in collaboration with FirstGroup PLC – it is 15% lighter with 30% capacity in more.

The contract was due to be awarded in 2019 but suffered a series of delays. The initial bidders included the German Siemens AG, which took legal action regarding the tender, and the Spanish Construcciones y Auxiliar de Ferrocarriles SA.