page_title: Intercity Express Programme
section_title: Contracts
hierarchical_section_title: Intercity Express Programme / History / Contracts
caption_attribution_description: English: New IEP trains for InterCity East Coast franchise operated by Stagecoach and Virgin
context_page_description: The Intercity Express Programme is an initiative of the Department for Transport in the United Kingdom to procure new trains to replace the InterCity 125 and InterCity 225 fleets on the East Coast Main Line and Great Western Main Line. These new trains would be built by Hitachi as part of their A-train family, classified as Class 800 electro-diesel units and Class 801 electric multiple units. Hitachi designated the units as the AT300 family, which is their Intercity High Speed fleet. Other AT300 units have also been ordered for other train operating companies, which are not part of the IEP.
context_section_description: In 2012 the Agility Trains consortia obtained financial backing from lenders including HSBC, Lloyds TSB, Mizuho and Bank of Tokyo Mitsubishi; a financing loan for trains for the Great Western Main Line (GWML) of £2.2bn was agreed by July 2012 including £1bn from the Japan Bank for International Cooperation (JBIC), with the remainder to come from lenders including HSBC, Lloyds-TSB, Mizuho, The Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank Ltd., Mitsubishi UFJ Trust and Banking Corporation and the European Investment Bank (EIB). The project was the first mainline rail project in the UK to be financed through a Public Private Partnership. JBIC loans provided £1bn of the funding, EIB £235M, and £1bn was through loans from the commercial banks - the loan period was 29.5 years. A further £280M was raised by share issues and share backed loans.
  The finalised £4.5bn contract for trains for the GWML and ECML was announced in July 2012. Financial closure was reached at the same time on the first phase of the contract, valued at £2.4bn, consisting of 21 nine-car electric (Class 801) and 36 five-car bi-mode trains (Class 800), 369 carriages total, for use on Great Western routes. The second phase of the contract consisted of 10 five-car and 13 nine-car bi-mode and 12 five-car electric units (227 carriages) for use on the ECML; financial closure on the second phase was initially expected in 2013. A £1.2bn option for further 30 nine-car electric trains (270 carriages) to replace the Intercity 225 on the ECML was taken up on 18 July 2013. Financial closure on the second phase of the contract (total 65 ECML trains, 497 carriages) was reached in April 2014; the value of the contract was £2.7bn over a 27.5 year lease, including design, manufacture, and maintenance; financing was through a number of Japanese, British, and French financial institutions, and the EIB.
  Agility Trains is to build and maintain the trainsets and receive payment from the train operator based on train availability. The Government is guaranteeing usage for ​27 ¹⁄₂ years.
  In 2014, the National Audit Office reported on the handling of IEP and Thameslink rolling stock projects by the DfT. Issues specific to the IEP were the failure to re-submit the contract to tender after the terms of the contract change (electrification program) led to an altered bid from Hitachi. The report also questioned the DfT's attempt to take leadership in the project, contradictory to general policy, without any prior experience of large scale rolling stock procurement. The NAO also gave its opinion that the DfT had handled communications with bidders poorly, increasing the likelihood of a legal challenge to their decisions.
  In October 2015, ITV News Meridian speculated that, because of the late delivery of the Great Western electrification project, an increased number of trains might have to be diesel-equipped; in May 2016 it was confirmed by the Department of Transport that 21 "Class 801" trains would be converted to bi-mode operation. Subsequently, these were reclassified as Class 800/3.
caption: CGI impression of a train in Virgin Trains East Coast livery (2014)
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