Deep spending cuts to hit Network Rail contractors

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 swathe of cutbacks, 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,” he warns.

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.”

from Construction Enquirer http://www.constructionenquirer.com/2017/04/03/deep-spending-cuts-to-hit-network-rail-contractors/

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