GERMAN firm Siemens has confirmed it will switch some train component production from its home country to the North East.

The company said work will transfer to its South Tyneside plant after winning a £1.4bn Government contract to supply train carriages for the Thameslink route, between Bedford and Brighton in the South East, over its Derby-based rival Bombardier.

Siemens has promised up to 2,000 new jobs in the UK as a result of it winning the contract, while Bombardier announced 1,400 job losses last summer.

Train carriages will be built in Germany, but around 600 skilled roles involved in making train components will be created in the UK – including up to 300 at Siemens’ Hebburn site.

Confirmation of the news comes as the House of Commons Transport committee said it would be in the public interest for the procurement process to be independently reviewed.

The committee has written to the head of the National Audit Office (NAO) – the Comptroller and Auditor General – to ask him to undertake the review and to report to Parliament before summer 2012.

Committee chairman Louise Ellman said: “We could not evaluate whether the decision to choose Siemens was arrived at correctly because all of the bids were and remain confidential.

“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.”

Her committee’s report also said putting train building and financing together in procurement risked favouring larger multinational firms, potentially at the expense of excellence in design and domestic manufacturing.

MPs want the Government to work with the railway industry to ensure train building can establish finance partnerships offering good value to the taxpayer while promoting long-term best value.

The report also found there was widespread agreement the criteria used were too narrowly drawn in excluding socio-economic factors.

The Government was urged to do more to ensure UK-based companies in the train-building sector enjoy a steadier flow of business opportunities, including new projects, before the next major train procurement.

Iain Malcolm, leader of South Tyneside Council, said: “Because of the amount of money involved, particularly in the present climate, we want to make sure that we get value for money, that the process has been fair to everyone.

“If there was a review by the National Audit Office, I am absolutely certain that it will see the process was all above board, met the criteria and confirms Siemens as the preferred bidder, which is good news for Tyneside.”

Jarrow MP Stephen Hepburn said: “Both Siemens and Bombardier are good companies. I am pleased that jobs have been created in the North East. I take the point that public contracts should maximise economic opportunities and cut unemployment. I want more jobs in the North East and across the country.”

A Siemens spokeswoman said: “Work is continuing as planned on the Thameslink contract, with a view to achieving commercial and financial close early next year.

“As part of this, we are making good progress with our detailed plans to transfer production of certain train components to our factory in Hebburn, which we envisage will create up to 300 jobs.”

An NAO spokesman said it was considering the committee’s recommendations and would respond later.

A Department for Transport spokesman said the report moved on from the process established by the previous Labour Government and endorsed the coalition’s decision to look again at how procurement could be improved.

The spokesman also said it would welcome an NAO review of the overall £6bn Thameslink programme following contract award of the rolling stock.

It expected such a review to examine value for money and lessons learned – applying both to the infrastructure and rolling stock elements of the scheme.

RMT transport union general secretary Bob Crow said there was no reason for the Government to push ahead with the “sabotage and destruction of the last UK train-building plant at Bombardier in Derby”.

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