Plans to create 1,000 jobs and a £40m train factory in Fife have been derailed after the firm behind the project failed to win HS2 contracts.
Spanish firm Talgo had proposed to create a multi-million-pound 80,000 sq metre factory on the site of the former Longannet Power Station.
The £40m Fife facility would also have created up to as many as 5,000 indirect jobs.
Talgo hoped to win a significant contract from HS2 for its high speed rail network in England.
But instead contracts worth £2 billion were awarded to two plants in England to make 54 trains.
They will be built at Alstom’s Litchurch Lane works in Derby and Hitachi’s newer factory at Newton Aycliffe.
‘Disappointment to the people of Scotland’
Talgo UK managing director Jon Veitch said the Government announcement was disappointing.
But he said the Longannet facility remains a “significant” part of the firm’s future plans.
He said: “The recent award of a train order to another company is a disappointment to the people of Scotland and to the Talgo team.
“However, the establishment of a manufacturing facility in the UK, at Longannet, remains a significant part of Talgo’s future strategy.”
A £40m train factory at Longannet
Talgo announced its plans in October 2018 for a £40m investment in an 70,000 sq ft facility near Kincardine, initially suggesting it was conditional on winning a big contract for HS2.
Its proposals received planning permission from Fife Council in December 2019.
In February 2020, Talgo unveiled one of its high-speed coaches in Kincardine as it reaffirmed its commitment to bringing 1,000 jobs to Fife.
The firm, which has its UK base in Chesterfield, said it would go ahead with the multi-million-pound project said the work did not depend on the HS2 contract.
In June this year it missed out on a contract to supply rolling stock for HS2.
Talgo launched legal action against HS2 in the summer in relation to the tender process. An out of court settlement was agreed.
In the summer, the Spanish firm suggested the Fife facility may be needed with its Spanish plants operating at capacity.
Mr Veitch said: “Talgo’s aim is to establish true manufacturing’ – rather than assembling from parts made overseas.
“This means that we will draw from materials and expertise across the UK.
‘This keeps more money in the UK economy and creates more skilled long-term jobs.
“Our plans for building Longannet are expected to swing into action as soon as we get an appropriate train order.
“That’s why we are supporting the planning process – to make sure that we’ll be ready on day one.”
Spanish firm still ‘committed to Scotland’
A Scottish Enterprise spokesman said the Spanish firm remains committed to Scotland.
He said: “While it is disappointing that Talgo have not been successful in their bid for the HS2 contract, the company has advised Scottish Enterprise that they remain committed to bringing operations to Scotland.
“We will support them to do so once we see their revised plans.
“In the meantime, we continue to promote Longannet as an attractive proposition for potential investors.
“We are still working to develop Scotland as an international centre of rail excellence and innovation.”
