Massive rail shake-up

Network Rail announced today it is taking over the maintenance of the railways.

The biggest shake-up since privatisation in the Nineties means a single workforce will be responsible for the upkeep of track and signals.

Seven private companies are to be stripped of contracts worth £1billion a year. More than 18,000 workers will be transferred to Network Rail. The move was greeted with delight from passengers groups and rail unions.

It brings back together a huge part of the industry broken up when the railways were sold off. London Underground could be next with the unions demanding Tube maintenance must also be taken away from the private sector following two derailments last weekend.

The decision by Network Rail (NR) would not have been taken without the approval of Tony Blair and Transport Secretary Alistair Darling.

A senior rail industry source said: "The Government has really bitten the bullet in allowing NR to do this. It signals the end of Labour's love affair with the private sector."

The move follows mounting concern about safety standards following a series of crashes and claims that the private companies were not up to the job.

Network Rail said that creating a single integrated maintenance operation will deliver key benefits.

  • Consistent high standards across the network.
  • Significant efficiency savings to be delivered from the annual maintenance budget of £1.2 billion.

NR chairman Ian McAllister said taking back maintenance in-house "is the right thing to do". He added: "We have obtained a clear understanding of the reasons why costs have risen in recent years.

"Bringing contracts in-house will ensure greater consistency of maintenance standards and help deliver efficiency savings far more quickly than would otherwise have been possible."

He said NR had thought "long and hard" before taking the decision.

NR said the "target date" of closing the contracts with its seven maintenance contractors including Amec, Amey, Balfour Beatty, Carillion and First Engineering, is late summer of next year.

Two weeks ago it was announced that Jarvis was pulling out of its mainline rail maintenance contract - worth around £180 million a year - following unfavourable publicity after the recent derailmentat King's Cross. Following last year's derailment at Potters Bar, in which seven people died, concerns about safety were raised by an investigation by the Evening Standard.

An undercover reporter worked with a contractor employed by Jarvis and uncovered a catalogue of failings.

Bob Crow, leader of the RMT union, said the move by NR was a "major step towards the complete renationalisation of the railways".

Richard Rosser, general secretary of the Transport Salaried Staffs Association, said: "This is very good news for the industry."

Network Rail, a not-for-profit company which replaced Railtrack, is run on commercial lines but any operating surplus is re-invested in the network.

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