Alstom Transport UK Ltd v Network Rail Infrastructure Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 20 December 2019 |
| Neutral Citation | [2019] EWHC 3585 (TCC) |
| Date | 20 December 2019 |
| Docket Number | HT-2019-000293 |
| Court | Queen's Bench Division (Technology and Construction Court) |
and
[2019] EWHC 3585 (TCC)
Mrs Justice O'Farrell DBE
HT-2019-000293
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Sarah Hannaford QC and James Frampton (instructed by Hogan Lovells International LLP) for the Claimant
Philip Moser QC and Stephen Kosmin (instructed by Eversheds Sutherland International LLP) for the Defendant
Rob Williams (instructed by Osborne Clarke LLP) for the Interested Party
Hearing date: 26 th November 2019
Further written submissions: 29 th November, 2 nd December, 3 rd December 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The matter before the Court is an application by the Defendant (“Network Rail”), for the lifting of the automatic suspension which arose on issue of a procurement challenge by the Claimant (“Alstom”) pursuant to regulation 110 of the Utilities Contracts Regulations 2016, SI 2016/274 (“the Regulations”). The application is supported by the Interested Party (“Siemens”). Alstom opposes the application and seeks to maintain the suspension, preventing Network Rail from entering into a framework contract with the successful tenderer, Siemens, for delivery of a digital train control system on the East Coast Main Line (“ECML”) pending the outcome of the trial.
Background
The European Train Control System (“ETCS”) is a common digital signalling and control standard adopted by the EU to improve interoperability between the railways in different Member States.
The ETCS uses digital radio to allow continuous communication and supervision between trains and infrastructure. The benefits of the ETCS are greater efficiency, reliability and safety. Conventional trackside signalling operates using a fixed block system. Safe distances are maintained between trains by allowing only one train in any part of a block at any time. The length of the block is determined by the worst braking distance for trains using a particular route, creating artificial constraints on efficiency. A digital signalling system can identify the precise location of each train. As a result, even where the block system is retained, additional blocks can be introduced so that headway between trains can be reduced whilst maintaining a safe distance. This enhancement to signalling facilitates mitigation of the impact of delays and quicker recovery from adverse incidents. ETCS requires fewer lineside signalling assets, increasing the reliability of the system and reducing long-term maintenance and renewal costs. ETCS includes an automatic train protection (“ATP”) system, that can reduce the risk of a signal passed at danger (“SPAD”) incident or speeding, and therefore reduce the risk of train collision or derailment.
Following the Southall and Ladbroke Grove rail accidents, the Uff/Cullen “Report of the Joint Inquiry into Train Protection Systems” was published in 2001. The recommendations of the report included the introduction of trackside ETCS on the ECML, installation of ETCS on all new trains and retrofitting of ETCS on existing trains within a realistic timetable.
The Railway (Interoperability) Regulations 2011 were introduced to implement the provisions of Directive 2008/57/EC, which is intended to improve technical compatibility between rail systems within the European Union. The 2011 regulations restrict the introduction of new infrastructure, trains and equipment that fail to comply with the EU technical specifications for interoperability (“TSIs”). It is possible to obtain a derogation, or exemption, from the requirement to conform with the relevant TSIs in specified circumstances, including any proposed renewal, extension or upgrading of an existing sub-system where the application of the relevant TSI would compromise the economic viability of the project or the compatibility of the project with the rail system operating in the UK.
Network Rail owns, operates and is responsible for the maintenance and development of Britain's railway infrastructure.
On 10 May 2018 the Secretary of State for Transport and Network Rail set out a joint fifteen-year digital train control strategy for the railway industry:
“The technology will be fully operational from next year on the Thameslink service in central London, which will see 24 trains pass through every hour. The Digital Railway Strategy is being launched in York, on the Transpennine route …
Digital rail technology will ensure the best use is made of the almost £48 billion being invested in maintenance, modernisation and renewal on the rail network between 2019 and 2024, which includes new and replacement signalling. The government has also earmarked £450 million specifically for digital railway schemes…”
Part of that strategy is the introduction of a digital train control system on the ECML. The ECML is a key, strategic rail network, running between London and Edinburgh. It carries more than 80 million passenger journeys and tens of millions of freight tonnes with a value of £30 billion per year.
On 7 August 2018 Network Rail published in the Official Journal of the European Union (“the OJEU”) a procurement notice for a train control partner for delivery of the ECML digital railway train control infrastructure. The notice stated that the contract would comprise a single supplier framework agreement for the delivery of digital train control systems on the ECML route, using two main types of call-off contracts:
i) professional services based on the NEC 4 th edition form of contract for outline designs, commercial and financial models and business case submissions; and
ii) design, build and maintain works based on the NEC 4 th edition form of contract for the detailed design, supply, installation and commissioning of the system together with ancillary conventional signalling as required to facilitate delivery of the digital system and long-term, 30 year maintenance of the system.
The estimated value of the procurement was £1.8 billion.
On 22 October 2018 Network Rail issued the invitation to tender stage one (“ITT 1”) documents to four shortlisted bidders, including Alstom and Siemens.
Paragraph 1.2.13 of ITT 1 stated:
“The southern section of ECML has been identified and prioritised for the deployment of digital train control technologies in the first instance. The southern section of the ECML has a unique alignment of the following factors:
i. The need to renew critical signalling assets in Control Period 6 (“CP6”) and Control Period 7 (“CP7”). CP6 runs from April 2019 and CP7 from April 2024.
ii. The opportunity to address targeted capacity and performance constraints to delivery passenger and freight benefits, as well as enhance safety for passengers and workers, and;
iii. 70% of all passenger trains on the southern section of ECML will have digital (ETCS Level 2) capability in the early stages of CP6.”
ITT 1 indicated that the first call-off contracts to be awarded pursuant to the framework agreement would be:
i) Commission Contract 000: professional services for the outline design for a train control system covering the southern section of the ECML from London Kings Cross to Peterborough North, with an anticipated duration of approximately 8 months and an estimated value of £10 million; and
ii) Commission Contract 001: a design, build and maintenance contract for a train control system for the Northern City Line (“NCL”) from Finsbury Park to Moorgate, with an anticipated duration of 32 years and an estimated value of £46 million.
ITT 1 stated that Network Rail would evaluate the tender responses to identify the most economically advantageous tender, having regard to the award criteria and weightings set out in the ITT. The criteria were weighted as indicated in section 4 of the ITT: (a) technical (70%) and (b) commercial (30%).
Tenders were submitted by three tenderers.
By letters dated 8 February 2019 Alstom and Siemens were notified that they had been selected as the two highest aggregate scoring bidders to proceed to tender stage two (“ITT 2”).
At ITT 2, different weightings were applied to the award criteria, namely: (a) technical (30%) and (b) commercial (70%).
By letter dated 1 July 2019 Network Rail notified Alstom that it had been unsuccessful in the procurement exercise:
i) Alstom scored 60.62% against the commercial criteria; the winning bidder scored 58.53%;
ii) Alstom scored 15.77% against the technical criteria; the winning bidder scored 19.18%;
iii) Alstom had an overall score of 76.39%; the winning bidder had an overall score of 77.71%.
By letter dated 10 July 2019, Network Rail identified Siemens as the successful bidder.
Proceedings
On 19 August 2019 Alstom issued proceedings seeking to challenge the procurement.
On 2 September 2019 Alstom served its Particulars of Claim, alleging breaches of Network Rail's obligations of equal treatment, transparency, good administration, proportionality and manifest error/irrationality. The remedies claimed by Alstom include an order setting aside Network Rail's decision to award the contract to Siemens, a declaration that the contract should have been awarded to Alstom and damages for lost profits and wasted tender costs.
On 9 October 2019 Network Rail served its Defence.
On 21 October 2019 Network Rail issued its application to lift the automatic suspension.
On 5 November 2019 Alstom served its Reply.
By a consent order dated 8 November 2019, Siemens was...
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