Abroad slams Hammond IEP decision!

Petrol-head's courageous decision to order a train that no one wants continues to be welcomed with joy by absolutely nobody.

This plaudit from UNIFE which claims to represent the European Rail Industry:

N e w s R e l e a s e

UNIFE alarmed by Hitachi’s winning prospects for UK Intercity Express Programme (IEP)

Brussels 02 March 2011 – UNIFE, the European rail industry, is alarmedby UK Transport Secretary Philip Hammond’s decision to resume negotiations on the Intercity Express Programme (IEP) with Hitachi. When launched, the IEP was considered the largest Rolling Stock order since privatisation of the British Railways, and is certainly amongst the largest orders that have ever been awarded to a rolling stock manufacturer in the world.

Whilst the UK government seems to content with the promised creation of 500 new jobs, a figure which is extremely low as compared to what could have been secured if the IEP was executed by a European supplier, this decision further reinforces the lack of reciprocity between Europe and Japan in rail procurement.

Thanks to clear and transparent public procurement rules transport-related tenders in Europe are largely open to foreign companies, while the Japanese market remains completely inaccessible to European rolling stock suppliers. Indeed, only 2% of the Japanese rail equipment market is opened to foreign suppliers. This de facto market closure is achieved through the extensive use of the so-called “Operational Safety Clause” by which foreign bidders are brutally excluded.

This situation is simply unacceptable as it provides Japanese companies with an unfair advantage when responding to tenders in Europe. With no competition to face on their home market, such companies are then able to submit highly competitive offers in EU countries, and are supported by the Japanese government to do so.

UNIFE and its member companies supply more than 50% of the worldwide production of rail equipment and services and strongly favor global market opening initiatives. However, we equally consider that reciprocity is a pre-requisite for fair competition. The rail industry cannot accept that European markets are increasingly opened to other countries’ suppliers whilst the latter remain closed.

UNIFE calls European governments put an end to such unbalanced market situation. In this respect, UNIFE Director-General Michael Clausecker stated: “The decision to accept the Hitachi bid is fundamentally wrong. It weakens the European position vis-à-vis Japan and shows the lack of interest of some governments to protect Europe’s industrial base against unfair trade practices.”

UNIFE wishes to remind that under the existing WTO agreements, Japanese firms do not enjoy any legal right to participate to procurement procedures in the field of railways. European entities may therefore exclude Japanese bidders under the provisions of the existing European Directives on public procurement. The UK Department for Transportation chose not to do so irrespective of the Japanese attitude to maintain their market closed and thus, not to offer equal business opportunities to European suppliers.


+++ ENDS +++
About UNIFE

UNIFE represents the European Rail Industry in Brussels since 1992. The Association gathers 73 of Europe’s leading large and medium-sized rail supply companies active in the design, manufacture, maintenance and refurbishment of rail transport systems, subsystems and related equipment. A further one thousand suppliers of railway equipment partake in UNIFE activities through 15 national rail industry associations. UNIFE members have an 80% market share in Europe and supply more than 50% of the worldwide production of rail equipment and services.

UNIFE represents its members’ interests at the level of both European and international institutions. On the technical side, UNIFE works on the setting of interoperability standards and coordinates EU-funded research projects that aim at the technical harmonisation of railway systems. The association is one of the supporting bodies of the European Railway Agency.

Perhaps our Euro friends will now think twice before meddling in UK politics?

UPDATE: This from Steve Strong...

When it comes to 'meddling in UK politics' it would appear that our Japanese friends have much to teach our 'Euro friends'!

According to the Secretary of State in the Northern Echo today...

"I have become firm friends and personal acquaintances with the Japanese ambassador over the last nine months - he has his own chair in my office.

"I even got invited to the Emperor's birthday party last year, in London."

Move along Alstom, nothing to see here.