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Government urged not to dismiss foreign suppliers

6 October 2011

The government has been advised not to overlook foreign companies in the rush to overhaul public sector procurement processes.

Procurement Leaders cited comments made to the Times by Dr Roland Busch of German engineering giant Siemens, who said automatically favouring UK-based suppliers over their overseas counterparts could have damaging consequences.

He told the newspaper that countries risk losing out on "huge potential" in terms of future economic growth by rejecting the services of foreign companies.

Dr Busch, who heads up the new sector infrastructure and cities division at Siemens, made his comments in the light of the ongoing controversy surrounding the £1.4 billion Thameslink contract.

Derby-based manufacturer Bombardier lost the deal - one of the UK's largest ever train orders - to a consortium led by Siemens earlier this year, leading to widespread criticism of the government after it emerged that 1,400 jobs would be cut.

Critics of prime minister David Cameron accused him of betraying British industry over the decision, with Labour activist Greg East recently claiming thousands more jobs could be lost in the supply chain as a result.

However, Dr Busch said foreign organisations should not be removed from the coalition's procurement agenda.

"With the right infrastructure and regulations you encourage [companies] to localise value added in your country," he told the publication.

"In doing that, you are opening up a much broader base of companies to invest in the UK, rather than focusing only on your local base."

A hearing into the Thameslink contract bidding process was held by the Transport Select Committee last month, but the MPs have said they will not recommend a U-turn on the decision.

Siemens announced that 2,000 new jobs will be created across the UK after it won the contract, although the trains will be built at factories in Germany.

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Categories: Procurement & Supply Chain


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