The Class 810 Aurora fleet is being delivered and maintained under contractual arrangements involving East Midlands Railway (EMR), Hitachi Rail and Rock Rail. Those agreements include contractual obligations relating to train availability and performance, together with associated performance and remedy mechanisms where contractual requirements are not met. The detailed terms of those arrangements, including any compensation or liquidated damages provisions, are commercially confidential and are not publicly disclosed.

The Department has been clear to Hitachi Rail that its management of the Class 810 fleet programme has been unacceptable. Delivery of the new Aurora trains to EMR has been significantly delayed, with the first train entering passenger service around three years later than originally planned. The Department expects Hitachi Rail to improve both the rate of fleet introduction and the operational performance of the trains already in service.

Hitachi Rail is also responsible for the day-to-day maintenance of EMR’s existing Class 222 Meridian trains, which have experienced significant performance issues this summer. The Department expects Hitachi and EMR to work together to rapidly improve the reliability of these trains.

Alex Hynes, Chief Executive Officer of Department for Transport Operator, meets Hitachi Rail regularly and is pressing the company for urgent improvements to both the delivery pipeline and fleet performance so that EMR can realise the full benefits of the new Aurora fleet. The Department continues to monitor EMR's delivery of services and performance obligations under its National Rail Contract.

Hitachi works closely with the train operators to deliver the required number of trains for service to Great Western Railway and London North-eastern Railway. Where Hitachi is responsible for any shortfall, contractual mechanisms are in place so that the operator only pays for the trains it receives each morning.

When the InterCity Express Trains were introduced on the East Coast line, daily train maintenance responsibilities passed from the train operator to Hitachi.

As part of that transfer, staff previously engaged in train maintenance underwent Transfer of Undertakings (Protection of Employment) into Hitachi, but the contract allowed for Hitachi to review how it managed its maintenance teams and had provision for Hitachi to restructure if necessary. To mitigate any uncertainties around the impact of any changes being reflected in additional unknown costs to Hitachi, (which would have resulted in a risk premium from Hitachi), the Department agreed that some of the costs in restructuring would be funded by London North Eastern Railway, in its role as the previous employer.

From a Value for Money perspective, these were unknown costs at the time of the contract award, and therefore the decision was made (in part for Value for Money, which was considered at an overall contract level) that it is better that these costs be priced as / when / if they occur, rather than priced seven plus years ahead by Hitachi.

Hitachi Rail UK are a significant supplier to the UK Rail Industry. The Government works in partnership with the private sector in the provision of trains for operation in the UK railway through the Rolling Stock Leasing Companies, and (in the case of the DfT procured Inter City Express fleets), Agility Trains. We do not hold data on what proportion of those lease and availability payments made by train operators to these partners ultimately flow to Hitachi Rail UK.

There is provision in the contract for trains operating on London North Eastern Railway for the operator to engage with Hitachi in relation to any potential redundancies but no such discussions have taken place.