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Three pin hopes on south-west rail deal

Firms ready to 'fight to the finish' for enlarged Network Rail maintenance contract

A BITTER fight is breaking out for a rail maintenance contract in south-west England with Amey and Balfour Beatty battling to claw back work after recent setbacks.

The pair have been joined by Carillion in what has been described as a 'fight to the finish' for the first area maintenance contract to be let under Network Rail's New Maintenance Programme All three are slugging it out for the contract to carry out maintenance in a new zone created by the merger of the former Bristol, Exeter and Gloucester areas.

But according to bidders the ante has been raised by Network Rail's decision to take over control of area maintenance contracts previously operated by Amey in Reading and Balfour Beatty in Wessex.

This decision has left Balfour Beatty with just two areas - Great Eastern and Kent - and Amey with only one, West Midlands and Chilterns. Both of these are up for renewal in 2006.

One project insider said: 'There are some scared people out there at the minute. You've got to have a certain level of work going through the books of your maintenance business for it to remain viable, otherwise you start falling down on things like safety standards because you no longer have the benefits of scale.

'Obviously Amey and Balfour Beatty will be throwing their entire weight behind this bid but you must remember that Carillion holds two of the three existing deals. To my mind they've got to be seen as favourites at this stage. Quite where that might leave the other two is anyone's guess. We've already seen Serco forced out of the market when they lost the East Midlands area. No-one wants to see these two follow in their wake.'

No annual value for the contract has yet been announced but bidders claim it will be valued at up to £50 million per annum over five years.

Carillion currently holds the Bristol and Gloucester contracts with Amey in control of the Exeter area.

Tenders are due to be returned in late September. Following the announcement of the preferred contractor, targeted for November, the winning firm will have a fivemonth run in the period before work starts under the new deal on April 1 next year.