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Hitachi reassures on UK trains

City A.M. Reporter
HITACHI, Japan’s biggest electronics maker, said yesterday it expected to keep train orders from the UK government worth £7.6bn despite admitting modifications to the agreement were likely.

A consortium led by Hitachi was chosen as a preferred bidder for the deal last year, but its shares have suffered in recent weeks due to speculation the project to build and service 1,400 InterCity trains would be cancelled or delayed under the coalition government’s austerity measures.

Gaku Suzuki, head of Hitachi’s train business, said: “This project is to replace 30-year-old trains, and we don’t expect the project itself to be scrapped. There will probably be some modifications due to the change in the government, but we believe we can still do it.”

A spokesperson clarified that while parts of the deal may be cancelled, it was unlikely to be entirely annulled.

Hitachi has been caught up along with rival French and German bidders in worries that a number of potentially rewarding contracts in the?US, Latin America and Europe could be under threat as governments reassess their spending plans.

Shares Hitachi fell yesterday, dropping 1.4 per cent to $37.73 in New York trading.

Investors appear to have been concerned at the cautious wording of Hitachi’s statements, which suggested parts of the UK contract could be scrapped.