The Rail, Maritime and Transport union said letters had been sent to major contractors detailing deferrals of an average of 28% of renewals work because of a financial squeeze imposed by the Office of Rail Regulation (ORR).

The union called for the re-instatement of Network Rail's full programme of planned renewals work and a reversal of cuts it said were planned in maintenance regimes and inspections.

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Jarvis warns of rail work plunge

Contract Journal: 22 Jan 2009
By Grant Prior

Network Rail has told Jarvis that work under its track renewals programme will be "significantly reduced" in the year to March 2010.

The firm put out a Stock Exchange announcement today stating: "Network Rail has communicated an intention to significantly reduce its track renewals volumes and expenditure in the year to 31 March 2010 from current levels for all of its four track renewals contractors.

"Jarvis is one of these contractors and is currently seeking clarification in respect of the likely effects and financial impact if this proposal is implemented."

The four contractors carrying out renewals work are: Jarvis, Amey SECO joint venture, Balfour Beatty and First Engineering.

Jarvis is one of four contractors currently working on the renewals programme, and was one of seven firms chosen yesterday by Network Rail for its £800m track enhancements framework.

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Jarvis shares slide on Network Rail cut-backs

Citywire: 22 January 2009
By Deborah Hyde

Shares in railway maintenance group Jarvis plunged more than 40% after the group issued a statement saying its business may be impacted by deferred track maintenance spend from railway operator Network Rail.

Shares fell 3.6p to 5p after the group said Network Rail had announced its intention to significantly reduce its track renewals volumes and expenditure in the year to 31 March 2010 for all of its four track renewals contractors.

Jarvis is one of the four contractors - which also include First Engineering (part of Babcock), Balfour Beatty , and Amey Colas - whose businesses will also be affected.

Jarvis said it was seeking clarification of the financial impact of Network Rail's move and would update the market as soon as possible.

Yesterday, Network Rail said it would defer around 10% of its track renewal spend, a move which enraged rail workers union RMT.

The union said the group has deferred 28% of its track renewals programme because of financial pressures from the Office of Rail Regulation (ORR), the industry's safety watchdog.

The union is demanding the re-instatement of the entire renewal programme and warned there could be more train crashes if this is not done.

'The efficiency savings demanded by the ORR are being translated into a massive assault on planned renewals, inspections and maintenance that raises the spectre of another Hatfield or Potters Bar,' RMT general secretary Bob Crow said.

The operator refuted claims that the cut-backs could endanger passengers. 'There will be no implications for passenger safety,' said a spokesman.

But while the operator and the union wage their war of words, Jarvis ' future is hanging in the balance.

Brewin Dolphin analysts have suspended coverage of Jarvis' shares and say Network Rail's cutbacks will have implications for both Jarvis' rail and plant divisions and potentially the future viability of the group.

In 2004, Network Rail and Jarvis accepted liability on behalf of the rail industry for claims brought over the Potters Bar crash - which killed seven people.

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Seven contractors to share £800M of rail upgrade work

New Civil Engineer: 21 January 2009
Mark Hansford

Seven contractors to share £800M of rail upgrade work

The framework includes work on Birmingham New Street and Thameslink

Network Rail has today selected seven contractors to form a five year framework for £800M of track enhancement work, including work on the Thameslink programme.

The seven contractors are: Amey Colas, Babcock Rail, Balfour Beatty, Carillion, Grant Rail, Jarvis, and Trackwork.

Network Rail added that over the next five years high levels of investment in track renewals will continue with almost £4bn being invested.

Total outputs for the five years will remain as previously planned although adjustment in phasing in the early part of the period will result in less volume of track renewals in the first year to allow time for new, more efficient ways of working to take effect delivering the value for money needed to meet tough ORR output targets as well as being less disruptive to passengers and freight users.

Simon Kirby, director infrastructure investment said; "We are committed to continue to invest in our railway to deliver ever higher levels of reliability for the passenger and freight users. But we must deliver value for money for this work and it makes sense to take advantage of new, more efficient methods of working in our future planned work.

"With smarter and more mechanised ways of carrying out track renewals coming on stream in a few years time, reducing volumes next year and ramping up in the years that follow will help to deliver the savings we need if we're to meet ORR output targets."