It has been a long, anxious wait, but the deal that will bring Hitachi to County Durham was finally signed and sealed last month. RUTH LOGNONNE hears how the £77m investment could benefit firms across the region IT WAS the region’s outstanding infrastructure – excellent ports, international airports, rail links and trunk roads – that persuaded Hitachi to build Britain’s next generation of Intercity trains in County Durham.
On July 25, Transport Secretary Justine Greening finally approved a £4.5bn contract to supply Britain with an Intercity fleet of 92 complete trains at Amazon Park in Newton Aycliffe.
Agility Trains, a consortium made up of Hitachi and John Laing, was awarded the contract to build and maintain the high-speed trains under the Intercity Express Programme (IEP), the project to replace Britain’s Intercity 125 trains with new, higher capacity modern trains.
More than 700 skilled jobs will be created with a further 200 jobs during the construction of a £77m factory. Around 2,000 more will be secured in the supply chain.
Hitachi will also locate its European rail research and development capabilities on the site, which will further enhance the factory’s ability to win rail contracts across Europe.
The train fleet will include electric and bi-mode trains, some five vehicles-long and others nine. Construction at the site is expected to begin next year and it will be fully operational by 2015.
The first trains will enter revenue-earning service on the Great Western main line in 2017 and on the East Coast Main Line by 2018.
It is anticipated that 10,000 jobs will be created over the next five years, between now and the trains being fully operational.
The final confirmation of the deal has been hailed as a major success for Newcastle-based Merchant Place Developments (MPD), which owns the site in partnership with Durham County Council.
MPD director, Geoff Hunton, said the site was the preferred location for Hitachi ahead of 42 others in the UK.
He said: “Newton Aycliffe is one of the larger towns in the area and has a strong industrial base. It’s seen by a lot of global manufacturers as the place to be.
Its closeness to the A1M has attracted inward investment and it is acknowledged as one of the region’s strongest logistics and distribution locations.
“This major win brings a whole new dimension to North East manufacturing and is the catalyst for many more things to follow. This is why we have been waiting for this deal to happen for so long.
“Our journey to formal confirmation has been a rollercoaster ride and not devoid of setbacks.
“The IEP programme was set up by the then Labour Government but then there was a change of Government in 2010 and the whole thing had to be reviewed.
“The global financial crisis made banks ultra-cautious about providing financing for the trains and the three depots, with Agility ultimately securing finance with a core group of lenders.
“In March 2011 they announced it was all going ahead in Parliament, but Hitachi still hadn’t signed a contract with the Government.
“It wasn’t until a few weeks ago that a contract finally existed and from my point of view we can now progress with the project.
“We will now be quickly completing contracts and getting on site as soon as is practical to start work before the end of this year for delivery, as a turn-key project in 2015.”
The Hitachi open day in May 2011 at the Xcel Centre, in Newton Aycliffe, attracted more than 1,000 people from 600 companies keen to learn about the business opportunities available during the construction and fit-out of the new factory. The event, thought to be the biggest of its type the North East has ever hosted, was a huge success and turned out to be heavily oversubscribed.
Speakers at the open day included representatives from Durhan County Council, Business Durham, MPD, Agility Trains and Hitachi Rail Europe.
One firm that is looking to work with the Hitachi-led Agility Trains consortium is Newcastle-based Hart Door Systems, which specialises in high-speed automatic doors.
Managing director Doug Hart said: “Our type of product is a high-speed, automatic door which provides energy-conserving facilities. It is also self-repairing. We are a family-run operation in Newcastle and we have been in business for 65 years so we have some clout behind us.
“This is the picture we’ve put to this client, along with similar clients and contracts, which we’ve completed of this type.”
At Heathrow, the firm has installed more than 50 smoke/fire doors and is to supply 155 multiple industrial roller shutters for Dubai Metro in the United Arab Emirates.
Although Hunton, of MPD, says no supply chain contracts have been agreed as yet, the firm has already worked alongside 15 other North East consultants to help bring the project to fruition.
Newcastle-based Ryder Architecture has already carried out work, along with environmental consultants E3, in Hexham and Wardell Armstrong in Newcastle.
MPD, which is made up of seven staff in Newcastle and five in London offices, has invested £500,000 in the project to date.
This has proved to be an investment that has undoubtedly paid off for the company.
“I can finally sleep at night,” said Hunton. “We’ve worked tirelessly with our partners to see this project finally signed off, but it is without doubt the biggest contract I have ever won in my career.
“There’s lots to do over the next six months, with our design team moving from outline design stage to full design stage along with contracts going out to tender and planning applications going in.
“It’s going to be full throttle for the next few years, but it’s what we’ve wanted to bring to the region for so long.”
The £77m investment has the potential to revitalise Newton Aycliffe, according to industry experts.
Simon Haggie, industrial partner at Knight Frank, said as a manufacturing base, the County Durham town has seen its industrial fortunes fluctuate.
He said: “The arrival of Hitachi will bring with it a 450,000 sq ft plant, more than 700 direct jobs and many more in the supply chain, reversing the decline in manufacturing in the town.
“The selection of Newton Aycliffe against 42 other UK locations underlines the town’s connectivity by road and rail – important for Hitachi as the company has horizons beyond the UK and contracts such as the IEP and is openly negotiating for contracts in Europe. This has potential for Teesport.
“This will be a significant inward investment for the North East.
“Though not comparable to the scale of Nissan, the Hitachi development will nevertheless underline the fact that the region is an excellent location for Japanese companies.
“Newton Aycliffe in particular will become an important focal point for a new industry.”