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Network Rail could take renewals in-house

Contractors fear Government will force track renewals back in-house after maintenance success

CONTRACTORS are speculating that Network Rail could face political pressure to take track renewals back in-house.

Industry insiders said that the company could be forced to make the move by transport secretary Alistair Darling following the improved performance since Network Rail took track maintenance back in-house in October 2003.

A source at one contractor said: 'Network Rail will have nothing to do with a decision and may not know when it is coming - it will be a political decision to bring renewals in.'

A second contracting source suggested that the chances of Network Rail bringing more work in-house had increased from 'very unlikely to 5050' And City sources believe Network Rail is eyeing up the rail renewals business of struggling support services firm Jarvis.

One said that that the firm - which took on 3,500 of Jarvis's former maintenance staff this year - would consider buying the business if the company failed.

The source said: 'There are strong rumours circulating in the City that Network Rail may be looking at taking over the renewals business of Jarvis. If they did it would be tantamount to renationalising the rail industry.'

A Network Rail spokesman said that there were 'no plans' to take renewals in house, while deputy chief executive Iain Coucher said: 'We are not looking at Jarvis's renewals business.'

But an insider at another major rail firm said:'Given the relative success of maintenance going back in, I would be amazed if they hadn't thought about doing the same with renewals.'

nCash-strapped Jarvis - which is understood to be close to selling its stake in the Tube Lines PPP - is still fending off hoards of unpaid subcontractors on its remaining construction projects.

One subcontractor on the Whittington Hospital PFI deal in north London said: 'I have had to pull my men off the site because we are owed over £60,000 and we are not being paid.

'They have been trying to tell people to hang on until December 17 - when they say they will be sending out cheques - but that's when their accounts department shuts for Christmas.

'We are not hopeful.'