Deep spending cuts to hit Network Rail contractors

Aaron Morby 8 years ago
Share

Specialist railway contractors are facing the deepest wave of spending cuts since the 2008 financial crisis.

Plans to cut a swathe of track upgrades have been revealed in an explosive leaked internal document published in the Independent newspaper.

A letter penned by a senior Network Rail official warns of testing times for the remainder of control period 5 up to 2019 because of overspending on the network.

He also warns that subcontractors will be hardest hit by the deep cuts, risking business failure in the supply chain.

 “Because of significant overspends in some areas, including some enhancement schemes and the fact that the routes are more expensive to run than predicted, there is simply not enough money left in CP5 to continue as we have been.

“Our sub-contract team members and our supply chain will be hit hardest, as this is the area of the business where we have potential to reduce our workforce quickly and relatively easily,” he warns.

“The last time the track renewals industry had a cost challenge of this magnitude, 7-8 years ago, the supply chain suffered massively (we lost a principal contractor and many second tier suppliers)…this is going to be a tough couple of years for the whole industry.”

Rail union RMT claimed the cutbacks would see 1000 safety-critical rail renewal jobs threatened.

RMT has written to Network Rail demanding that the cuts be halted.

General Secretary Mick Cash said: “These planned cuts are a scandal and would impact on services and safety at a time when our railways are already running right at the limit of safety tolerances.

“Track that is past its safe operational sell-buy date would not be replaced within safe time limits running the risk of repeated failures and possible derailments. That is the Government, through the ORR, playing fast and loose with rail safety.”

 

Latest news

Hill hits record £90m profit as homes pipeline swells

Build-to-rent push and £4.8bn contracting book to fuel next growth phase
12 hours ago

Rayner unveils £39bn plan to build 300,000 social homes

Council building revival and rent reform feature in social and affordable homes plan
20 hours ago

Keltbray bounces back with £3.2m profit

Tighter controls and smarter project selection fuel strong turnaround
20 hours ago

VINCI JV wins 500-home twin town centre revamps

Chester Northgate phase 2 and Northwich Weaver Square schemes move to delivery stage
20 hours ago

80 energy projects unlocked as Ofgem backs grid expansion

£24bn energy networks deal gets green light from regulator
2 days ago

How to see your stories on the Enquirer

Join our Suppliers and Buyers directory to get your news published
20 hours ago

Henley lands Midland Mill revamp on Leeds tower scheme

Restoration of 18th-century mill kicks off on South Bank regeneration project
19 hours ago

New boss at Eric Wright Civil Engineering

Gavin Hulme takes top job as Diane Bourne moves to group role
1 day ago

Pinewood submits £1bn data centre plan

Studio giant adds green and learning spaces to tech hub blueprint
2 days ago

Record results after TClarke goes private

Britain's biggest M&E contractor flourishes after de-listing
2 days ago

Dalkia lands £200m nuclear maintenance deal

1,000 nuclear FM staff to join M&E contractor
2 days ago

Construction comeback to outpace wider economy

Arcadis forecast fueled by spending review optimism
3 days ago

First steel goes up on giant car battery site

Severfield gets to work on McAlpine Somerset site
3 days ago

Permasteelisa wins cladding deal on Bovis city tower

Facade specialist lands package at 60 Gracechurch Street
2 days ago

Fox buys recycled asphalt specialist Fisher

Acquisition adds major recycled asphalt capacity in north west
3 days ago

Major Building Safety Regulator shake-up to end tower delays

HSE stripped of control and top fire chiefs brought in to fast-track stalled schemes
3 days ago

Hinkley trio sign Sizewell civils deal

Balfour,Bouygues and Laing O'Rourke form Civil Works Alliance for new power station
3 days ago

£3.9bn data centre plan for Ravenscraig steelworks

Green energy to power massive new steel to silicon AI campus
3 days ago

Breakthrough on HS2’s second longest tunnel

8.4 mile Northolt to Old Oak Common drive completes
3 days ago

Neilcott on fast-track to debt-free employee ownership

£22.5m loan nearly paid down after big profit year
3 days ago

TfL kicks off race for £700m Tube station upgrade

South Kensington and Elephant & Castle top the pipeline list
3 days ago

Corbyn Plant Hire fleet goes under the hammer

Kit to be sold off by sister firm to collapsed groundworks contractor
3 days ago

Government wields procurement stick on late payment

New rules would block slow payers from bidding on big public jobs
6 days ago

Hercules buys power line labour firm for £15.7m

Labour supply specialist snaps up Advantage NRG to tap booming electricity upgrade market
6 days ago

Universal bid to fast-track planning for theme park

Entertainment giant eyes 2026 start at Bedford site
6 days ago

Developer Breck to transform former Ibstock brick factory

Ravenhead works to become 300-home development
6 days ago

SP Energy Networks awards contracts worth £1.4bn

First round of awards under £5.4bn national electricity grid upgrade programme
7 days ago

Travelodge to convert Liverpool Street office building

Office-to-hotel conversion in City of London
6 days ago

Plans lodged for 1m sq ft City of London office

Barbican landmark building will reuse 40% of existing structure
6 days ago

PTSG acquires roofing specialist HD Sharman Group

Premier Technical Services Group expands building maintenance division
6 days ago