THE final piece of the jigsaw to bring train building back to the North-East has been put in place, paving the way for jobs and investment.

Hitachi Rail Europe Limited has signed the contract with Newcastle-based Merchant Place Developments (MPD) for the construction and fit-out of a manufacturing plant in Newton Aycliffe, County Durham.

The deal rubber stamps the project to build Hitachi’s first train factory in Europe - an £82m investment to assemble the next generation of high speed trains in the North-East.

MPD, the developer and owner of the Amazon Park site, has now gone from preferred bidder status to full contract award, enabling the firm to award further contracts to build the plant. 

Last month, archaeological exploration started on the site, which will take up to four months before construction starts at the end of 2013, with the factory scheduled to go into production in 2016. The Super Express Trains will go into full passenger service in 2017. 

Alistair Dormer, executive chairman and chief executive of Hitachi Rail Europe said: “The close of contract with Merchant Place Development signals a new phase in Hitachi’s commitment to the British rail industry. 

"By investing substantially in our train factory, we are creating employment opportunities for a large number of engineers and technicians in the North East of England, which has a strong tradition of engineering skills. 

"We are keen to fill our order books, building trains here in the UK – for use in Britain and for exporting to continental Europe.”

The factory will initially be used to build the Super Express Trains for the Great Western Main Line and the East Coast Main Line, with the potential to be used for other orders such as building Crossrail rolling stock, should Hitachi be the successful bidder.

The Japanese firm said it places great emphasis on employing locally where possible. The factory, which will include a research and development department, will create 730 jobs. It is expected that 200 jobs will be created during the construction phase. 

“This is the formal element of bringing Hitachi Rail Europe to the North-East," said Geoff Hunton, director of Merchant Place Developments. “We have taken the design of the plant to a detailed stage and have been in discussions with suppliers and contractors so that we are ready to move ahead with the development programme. 

"I believe this says much about our region, our skills base and the connectivity to Europe and beyond through our ports in particular. It also says a great deal about our investors who have been very loyal to this project since we first acquired Amazon Park five years ago. 

"It is these investors who financed the purchase of the site rather than the traditional institutional funding route and without those investors we would not be where we are today.

"It is also a tribute to the team effort that brought this very significant inward investment to Newton Aycliffe notably through the help we have had from Durham County Council, Business Durham and cross-party political support headed by Phil Wilson, MP for Sedgefield,” Mr Hunton added. 

Hitachi singled out Newton Aycliffe as its preferred site for its manufacturing plant, after evaluating over 40 locations throughout the UK.