http://www.railpro.co.uk/magazine/?idArticles=1036Rail Professional interview: Alistair Dormer September 2011 Paul Clifton
Hitachi proved the doubters wrong. The ^4.5bn Intercity Express Programme deal is due to be signed by the end of the year. And the first new trains will be here in three years. Alistair Dormer talks to Paul Clifton about the work ahead
It^s now six years since the start of the Intercity Express Programme. It^s two-and-half-years since Hitachi was named the preferred bidder. And still no contract has been signed. The deal has not been done, and no trains have been built. Hitachi^s original plan saw a power car at each end of the train. That idea has been replaced by underfloor diesels on two thirds of all the trains likely to be ordered.
So how much of the original plan has survived? ^The vast majority of it. There has been very little change.^ Hitachi boss Alistair Dormer^s response is surprising. His train has been through so many stages, so many reconfigurations, investigations, assessments and alterations that, to an outsider, what is now proposed looks substantially different from the concept promoted by Alistair Darling when he was transport secretary.
Not so, says Dormer.
^The original tender was an output specification and it was up to the bidders to come up with solutions. We were told that the trains would be 125 miles an hour, carriage length was 26 metres. Capacity should be maximised, with short dwell times, fast acceleration, high safety levels, environmentally friendly and costed over the whole life of the train. The contract has not changed. The specification has not changed. It did not say what power source should be used; it said there would be a family of trains ^ electric, bi-mode and self-powered. The number of carriages has changed, but it is still within the original plan for anywhere between 500 and 2,000 vehicles.^
Nevertheless the design has altered a lot. Dormer^s comment is at odds with the review by Sir Andrew Foster, commissioned by the government to see whether the Hitachi deal still represented value for money. Foster wrote last year: ^The review team and I have found it difficult to make sense of the multiple changes to programme specification over its lifetime, and their effects on benefit:cost ratios.^ He said the government had failed adequately to consider alternatives.
Many people interpreted the report as the final nail in the
IEP▸ coffin. Dormer did not.
He now says the move from power cars at each end to underfloor power gradually became obvious, as the thinking moved away from merely replicating the ageing high speed trains. The electric trains already had a ^donkey^ diesel engine, capable of rescuing a stranded service and getting it to the nearest station at 30 miles an hour.
^Why not add another two engines on the five-car variant and get 125 miles an hour? By doing that we reduced a lot of cost. But the output hasn^t changed. The specification hasn^t changed.^
Most comparable diesel multiple-unit trains in the
UK▸ have Cummins engines. But Hitachi is keen to point out that no deal has been done with an engine builder. This autumn it will ship a Cummins engine and another from
MTU▸ in Germany to Japan, where it is currently building a bodyshell. It will run both engines in a test chamber to measure operating temperature in varied climates, noise levels and the amount of vibration. It will not place orders until the tests are complete.
^We^re going to get married to these guys,^ explains Dormer. ^They are going to be with us for the next 30 years, unless there is a big change in whizz-bang technology that means we take all the diesel engines off.^
The concept of carrying the dead weight of unused diesel engines under the wires for long distances has attracted widespread criticism. Many people have suggested that attaching diesel locomotives where electrification ends would be more efficient. The real reason is flexibility ^ these trains are capable of operating anywhere. They can cope with diversionary routes and journeys such as Great Western^s Cotswold services where a lot of the journey will remain diesel.
^We looked at weight. For a five-car train, the engines weigh 16 tonnes spread over the length of a train that would be 240 tonnes anyway. A 70-tonne loco causes much more damage to the track than distributed traction. So it weighs more and you can^t put passengers above the motor. The train doesn^t need an additional driver in an additional locomotive, with the infrastructure for that loco and the staff to connect it.
^Plus we at Hitachi don^t make locomotives! The numbers all indicated that bi-mode was the right direction.^
Six years ago Geoff Hoon, who was briefly transport secretary, put the value of the contract at ^up to ^7.5bn^. Now the figure is ^4.5bn.
That sum is the cost of providing the trains and running them for the next 30 years, at today^s prices, with all maintenance, depot construction and staffing included. ^If we don^t provide a train in the morning we don^t get paid. If the train breaks down in service or causes disruption to others then we get penalised. If the train is dirty or the toilets don^t work properly we get less money.^
The first four five-car, bi-mode trains will be built entirely in Japan because the new factory at Newton Aycliffe in County Durham will still be a building site.
^The reason we need four trains is that we need to test, on the network, two trains coupled together passing two more trains coupled together. That^s the most severe electromagnetic test we must do, to make sure nothing crazy happens.^
Dormer says the contract is 98 per cent complete. The fleet size and shape is set in stone, and the contract terms and conditions ^ the fine detail ^ is practically finished. Hitachi expects to sign on the dotted line by the end of the year. No deals have yet been done with any suppliers.
Dormer says more than 70 per cent of the contract value will be spent in sterling. That is primarily because 30 years of maintenance is included in the figure.
He insists Newton Aycliffe, which will be connected to the Darlington to Bishop Auckland line, will not be just a final assembly plant. ^Hitachi is a systems integrator. We design the platform, but we buy the systems from the supply chain. On the Class 395s, 50 per cent of these were from Europe: brakes from France, pantographs from France, the seats were German and controls, relays and lighting were British. You bring in all these components.
^Yes, the bodyshells will come from Japan. But the Hitachi ambition is that we will increase the work at Newton Aycliffe over time. Ultimately, if we are successful at attracting more business, that will include building bodyshells and bogies there.^
In the original announcement, Geoff Hoon boasted that it would create or safeguard 12,500 jobs. Nobody had a clue how he arrived at that huge number; Hitachi says the factory will employ 500 people. But the impact, rippling through the supply chain, will be much bigger.
^I don^t fully understand the economics of job creation in manufacturing,^ Dormer admits. ^We have commissioned a study into the effects on the north east, and Durham County Council has done a separate piece of work. We came up with a figure that 9,500 jobs would be related to our factory. Durham^s figure was even bigger.^
The first trains will arrive in the UK for testing in 2014. The factory at Newton Aycliffe will open in 2015 and mass production will follow in 2016. The bi-mode fleet on Great Western will come into service with the December 2016 timetable change, and the electric variant will follow in 2017. That should mean the Great Western electrification will be complete and ready for the trains. If it is not, the Super Express trains can run as diesels. Hitachi has applied for planning permission to build a new depot in Bristol. In London, it will use the North Pole depot previously used by Eurostar.
Dormer^s current title is acting chief executive of Agility Trains ^ the financial vehicle used by Hitachi and partner John Laing (in a 70/30 per cent split) to bid for the Intercity Express Programme. Once the contract is signed, he will revert to his day job as managing director of Hitachi^s European rail business. He says a chief executive for Agility will be recruited, but this will be a ^very thin^ company of half a dozen staff only, to interface with the Department for Transport.
Then his target will be to win more orders. Hitachi is one of five manufacturers shortlisted for the big Crossrail contract. Dormer thinks the awarding in June of the ^2bn-plus Thameslink order to German firm Siemens indicates that political pressures are not a factor in choosing train builders. Bombardier in Derby could shed substantial numbers of local jobs as a result, with more in the supply chain.
^I understand Siemens made the most cost-effective order and that^s what the taxpayer needs. IEP and Thameslink are a new type of contract, and some people don^t like this. It^s the first time the specification has included whole-life costs. Not just the manufacture but the impact on infrastructure, energy consumption, speeds of vehicles to maximise route capacity ^ a whole system approach to procurement. We^d like to think there are more orders to be won from the UK.^
For Dormer, getting the deal done has been a very bumpy ride. He concedes that there are frustrations in working with an industry that runs ^at such a slow pace^.
^The industry has to look out of itself more. In aviation, why do the lowest cost airlines ^ Ryanair and Easyjet ^ have the newest fleets of aircraft? Because they have the lowest operating costs. I joined in 2003. We had half a dozen people in total. Hitachi wanted us to find a way into the European market. It took until 2005 to get the first contract, and we delivered the Javelins on time and on budget. So in 10 years, with winning the IEP contract, we will have gone from a handful of employees to turning over hundreds of millions of pounds a year.
^Really, in 10 years coming that far from nothing is quite quick for most companies.^
Dormer, who is 47, is very self-effacing. He has adopted the Hitachi culture, and often slips into a corporate language you will never hear spoken on the station platform.
So when he eventually walks away, what part of the project can he point to and say: that bit is down to Alistair Dormer?
^I don^t think any of it is Alistair Dormer. I was lucky enough to lead the bid. This team is why we are successful. Hitachi told me the target: to break into the British market. This is a company with 350,000 staff. It has the product, the brand. And it left me entirely to adapt that to the situation here. My job is to steer the energy of the people who can convert what we already have to what the customers here require.^
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