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Hitachi debacle strengthens Franco-Chinese hand in UK nuclear industry

13 Comments
By Geert De Clercq

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Britian should make its own nuclear reactors.

3 ( +3 / -0 )

What a wasted deal, Interestingly enough, the UK invented trains and we sold them a shinkansen.

1 ( +1 / -0 )

That would be ideal, but unfortunately there's no money for it. Britain took on a tremendous amount of debt during the 2008 financial crisis and they've barely paid any of it back as health and social security spending continues to increase year after year. They can't even afford to keep providing free prescriptions of gluten free pizza crusts and biscuits on the NHS let alone a nuclear reactor.

https://www.england.nhs.uk/2018/11/gps-stopped-from-prescribing-gluten-free-pizzas-cakes-and-biscuits/

-1 ( +1 / -2 )

Having seen the behaviour of Japanese companies, and Japanese law recently, I would be far more comfortable with French / Chinese investment.

3 ( +4 / -1 )

Some very interesting comments here:

https://japantoday.com/category/business/japan%27s-hitachi-freezes-british-nuclear-project-1#comment-1814594

Thanks to Samit Basu for the enlightening post. The comments about the Chinese CGN design really don't fill one with confidence.

What a wasted deal, Interestingly enough, the UK invented trains and we sold them a shinkansen.

We? I thought you were American?

Sadly, and for reasons unknown, the Tory government decided not to give contracts to manufacture parts for the trains to British companies. Most are imported from Japan. British manufacturers were understandably upset:

https://www.theguardian.com/business/2016/dec/12/british-components-for-british-trains

-2 ( +0 / -2 )

Sadly, and for reasons unknown, the Tory government decided not to give contracts to manufacture parts for the trains to British companies. Most are imported from Japan. British manufacturers were understandably upset:

I am sure that this could be reversed very quickly.

-2 ( +0 / -2 )

Sadly, and for reasons unknown, the Tory government decided not to give contracts to manufacture parts for the trains to British companies.

The reasons are hardly unknown. Hitachi's UK based subsidiary won the competitive tendering bid.

I am sure that this could be reversed very quickly.

How? By scrapping the trains that have already been built, paying tens of millions in contractual penalties to Hitachi, paying unemployment benefits to hundreds of British workers who are building the trains at Hitachi's Darlington plant?

1 ( +1 / -0 )

Most are imported from Japan.

Care to back that up with some evidence?

"A new train factory has been opened in north-east England by Hitachi, and heralded by the prime minister and chancellor as a further boost for their plans for a “northern powerhouse”."

https://www.theguardian.com/uk-news/2015/sep/03/hitachi-factory-george-osborne-northern-powerhouse

2 ( +2 / -0 )

How? By scrapping the trains that have already been built, paying tens of millions in contractual penalties to Hitachi, paying unemployment benefits to hundreds of British workers who are building the trains at Hitachi's Darlington plant?

By honouring existing contracts, (unlike Japan who refuse to pay the final installment for the scrapped Olympic stadium) and maybe looking elsewhere. The cheapest deal is not always the best.

Actually, I love the Intercity 125 trains which run on UK's West Coast Line. I love that distinctive hum as they pull out of Paddington station.

1 ( +1 / -0 )

@Ex_Res

By honouring existing contracts, (unlike Japan who refuse to pay the final installment for the scrapped Olympic stadium) and maybe looking elsewhere.

I'm not sure I follow. The last Intercity 125 rolled off the assembly lines in the 1980s. To my knowledge there was no outstanding contract that the government failed to honour by ordering new rolling stock. But perhaps I've completely missed your point? As far as looking elsewhere, I think all of the major train manufacturers bid for this contract (Bombardier, Alstom, Siemens etc.) but Hitachi had the best bid (I'm not sure if it was necessarily the cheapest).

The cheapest deal is not always the best.

I agree that this is generally true in life, but these public procurement contracts are usually very strict. The contract would stipulate everything from fuel consumption, to durability of specific components, and probably even the required thread count on the seat covers. Any deviations from the bid contract would need to be cured at Hitachi's expense. Unless Hitachi goes bankrupt, the public is guaranteed to get exactly what was agreed for the exact price that was agreed. Competitive tendering is probably the most cost efficient, transparent and corruption free way of public procurement.

The alternative is to politicise the entire process like the Americans do with projects such as the F-22. Britain could opt to spend billions more and have at least one component of the train manufactured in every political constituency. Some additional jobs would be created, but the majority of taxpayers would lose by having politicians dole out corporate welfare and repay political favours to well connected people. For example Sir Andrew Cook CBE's anger at not being awarded any part of the contract might be better understood after you learn that he has donated millions to the Conservative party over the years.

Actually, I love the Intercity 125 trains which run on UK's West Coast Line. I love that distinctive hum as they pull out of Paddington station.

I can understand the nostalgia of such an iconic design, but I assume that at some point it would cost more to maintain the old 70-80s tech than to replace it.

0 ( +0 / -0 )

China is already the biggest player in the fourth generation nuclear reactors. There are simply too many legal obstacles for the western companies to catch up.

0 ( +0 / -0 )

@M3M3M3

 Britain took on a tremendous amount of debt during the 2008 financial crisis

Japan's "debt" is considerably higher and it can "afford" some of the world's most ambitious and costly industrial projects. In both countries, the debt is issued in a currency the country issues and thus should never be a restraint on such crucial public investment.

love the Intercity 125 trains 

Me too, I think more efficient, modern-day successors could be a great low-cost option to high-speed rail if managed properly.

0 ( +0 / -0 )

The new nuclear projects in the UK are massive risks. They have been shown to be on par with the cost of building renewables but nuclear plants often (not always, but often enough) go over-budget & run late. Seeing as construction will take up to a decade vs a year or two for the likes of wind turbines, what is the UK potentially passing up in the way of renewables & energy storage, given that they could even wait another 5 years to start?

Base load power is good for grid stability, but the likes of a few new gas fired power plants, combined with renewables seems a safer (and cheaper) option.

0 ( +0 / -0 )

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