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HS2 has signed a £2bn contract with Hitachi and Alstom to build the fastest trains manufactured in the UK.

What does this mean?

The 225 mph trains will begin production at the Hitachi plant in Newton-Aycliffe, County Durham and end at Alstom's Derby and Crewe plants. Transport Secretary Grant Shapps said this marks a revolution in British railways. The project will build on Japanese bullet train technology and the experience of European high-speed networks to create some of the fastest, quietest and most efficient trains in this regard..  To complete the HS2 train, the first steps, including body assembly and initial equipment, will be carried out at the Hitachi railway plant in the UK. Alstom will perform the second phase of setup and testing. The first train is expected to roll off the assembly line around 2027, and after testing, the first passengers can be transported in two to six years.   

HS2's transactions with Hitachi and Alstom became the subject of litigation by rival manufacturer Siemens. It is reported that Siemens will now demand damages during the procurement process, and HS2 will receive "reliable" protection. Siemens abandoned part of its lawsuit against HS2, which involved a $2.8 billion train contract because it sought other lucrative jobs on the new high-speed line. The German company will no longer seek an injunction against litigation, clearing the way for the government to grant Hitachi and Alstom a flagship deal on Thursday.   

How does this impact the legal sector?

Environmental complaints have been filed against HS2 since 2014, and in July 2020, naturalist and TV personality Chris Packham enlisted the help of Li Day's lawyers to appeal the project. Among other things, the applicants argued that the government had not fully assessed the project's environmental impact and had failed to fulfil its obligations under the Paris Agreement and the Climate Change Act. The appeal was dismissed, after which Packham said: "COVID-19 has turned the state of UK finances and public attitudes towards climate change on its head.    

The HS2 project introduced work for law firms specialising in project finance and infrastructure. Factors that lawyers had to consider alongside the environmental impact were whether there were any existing impacted property, construction and operating costs and logistics. The HS2 project had individual civil works, stations and separate system contracts. They each had their processes for bidding, contracting and awarding contracts — all that required significant legal input from commercial law firms.

Phase 1 of HS2 received royal approval in 2017, and phase 2 expected to receive approval by the end of 2020, but the project ran into problems in the procurement phase almost immediately. In 2018, Spanish manufacturing company Talgo filed a lawsuit against HS2 over what was perceived as a "failed" rolling stock procurement process after a rival Spanish bidder was shortlisted at an advanced stage. American engineering giant Bechtel later filed a lawsuit in the High Court after losing a £1.3 billion contract to build Old Oak Common Station. Although the company has since withdrawn its legal proposal to begin operations, it still plans to file a lawsuit against HS2 to manage the procurement process.    

The bosses of Siemens, which is building a new £200m plant in Goole, East Yorkshire, are believed to have focused on other HS2 contracts that will soon be banned. Siemens is one of four companies selected to provide electronic signals in stages one and 2a of HS2, a contract worth more than £500 million. It is understood that the injunction was withdrawn by Siemens for two reasons. The disagreement could affect its chances of winning more contracts, and it will be liable for legal costs of hundreds of millions of pounds if the injunction is prosecuted, but the court ruled against the company.

ASSESSING FIRMS:

#Allen & Overy LLP #Bryan Cave Leighton Paisner LLP #Clifford Chance LLP #Addleshaw Goddard #Herbert Smith Freehills LLP #Hogan Lovells International LLP #Linklaters LLP #Mayer Brown International LLP #Paul Hastings LLP

Written by Jason Connolly