LONDON/TOKYO (Reuters) - Britain has approved a 4.5 billion pound ($7 billion) contract with a consortium led by Japan's Hitachi (6501.T) to build 92 intercity trains at a newly-built factory in northern England, in a deal which will create more than 900 UK jobs.
The Agility consortium, made up by Hitachi and British construction company John Laing, has long been the preferred bidder for the contract, which the Japanese firm had originally hoped to seal by December 2009.
Hitachi will assemble 596 railway carriages at the factory to be sited in County Durham in north east England, Britain's Department for Transport said on Wednesday.
The deal will create 730 skilled jobs at the factory, with a further 200 jobs during the site's construction, said British Transport Secretary Justine Greening.
The company will also locate its European rail research and development facilities at the site, a move which would enhance the factory's ability to win further rail contracts across Europe, Britain's Department for Transport said.
The contract has been seen as key to Hitachi's ability to break the dominance of Germany's Siemens (SIEGn.DE), Canada's Bombardier (BBDb.TO) and France's Alsthom (ALSO.PA) in the global railway market.
Hitachi said it aimed to begin production as early as 2016 at a rate of 35 rail cars per month.
The trains will replace existing diesel-powered trains dating back to the 1970s and 1980s. The new rolling stock will be a mixture of all-electric and "bi-mode" diesel-electric trains.
Reporting by Tim Castle in London and Miki Kayaoka in Tokyo; editing by Rhys Jones