U.K. Auditors Should Probe Train-Contract Award, Lawmakers Say

The U.K.’s National Audit Office should review the way the government awarded a contract to build trains for London’s Thameslink line, a panel of lawmakers said.

In June, the government gave the contract to build 1,200 carriages to Siemens AG (SIE) of Germany. Bombardier Inc. (BBD/B), the world’s biggest trainmaker, said the decision would force it to eliminate more than 1,400 jobs at its plant in Derby in the English midlands, threatening the future of Britain’s last railcar factory.

“We could not evaluate whether the decision to choose Siemens was arrived at correctly because all of the bids were and remain confidential,” Louise Ellman, the opposition Labour Party lawmaker who heads Parliament’s Transport Committee, said in an e-mailed statement. “We believe that in the public interest an independent review must evaluate whether this massive contract was awarded correctly on the basis of the criteria in the original invitation to tender.”

The cross-party committee has asked the NAO, which scrutinizes government spending, to report by mid-2012. Lawmakers want to know whether “socio-economic factors” such as whether the trains would be built in the U.K. should have been taken into account.

Unite, Britain’s biggest labor union, urged the government to put the contract on hold and begin a full inquiry.

“We have consistently argued that the government failed to think about the social and economic consequences of its decision to put tens of thousands of manufacturing jobs on the scrapheap,” Unite General Secretary Len McCluskey said in a statement. “It appears a decision was also based on the preferred bidder’s ability to raise cash rather than build trains.”

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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