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Difficult client and tight margins force firms to quit rail sector

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CONTRACTORS AND consultants are rejecting Network Rail projects as decreasing margins and 'difficult' client relationships are forcing staff out of the sector, senior industry figures told NCE this week.

Firms said they were losing staff to other industries as engineers are choosing not to work for the client.

'We want to be in the rail business and want to have contracts, but there's a lot of aggro and a lot of younger guys are put off, ' said the director of one major consultant's rail division, who wished to remain anonymous for fear of commercial reprisals from a monopoly client.

'This is a market in which engineers can pick and choose where they work, and people are having a hard time in the rail sector. They are saying 'bugger this, I want to do work which looks a bit more fun', like the Olympics or building work.' director explained that this was leading to firms rejecting Network Rail work in favour of other sectors.

'There are fewer and fewer firms bidding. People are being selective - there may be Network Rail jobs out there that nobody's bidding for, ' said the director of one major consultant's rail division.

'Network Rail is under great pressure [from the Rail Regulator] to reduce its costs - there's a 30% efficiency drive over five years. But Network Rail Major Projects & Investment is struggling to see how they'll get continued improvements.' The warning that firms are set to ditch rail work came following a panel discussion at last week's NCE conference, The Future of UK Rail, at London's Barbican Centre, at which it emerged that ms are struggling to resource rail work.

Atkins director for the Midlands region Stephen Ashton said that Network Rail's penny pinching was creating recruitment and retention problems across the consultancy sector.

'Our guys are looking at worklife balance and are unwilling to work the long hours they used to. They're also unwilling to be beaten up by Network Rail. They are looking for work elsewhere - where they're not being asked to do more for less, ' he said.

Mott MacDonald railways director James Martin added: 'Driving down cost at the expense of quality isn't good for recruiting and retaining staff.' The complaints come nearly two years after Network Rail was slammed for failing to pay its consultants on time (NCE 2 June 2005).

Last week Ashton cautioned that Network Rail's culture is inhibiting innovation. 'It takes so long for Network Rail guys to buy into new ideas, it's demoralising and demotivating.' 'Network Rail is looking to take work in house and recruiting staff from outside the rail industry.

'Their knowledge of engineering in a railway environment isn't always that deep.

They're not 'intelligent' staff.

'There are times you work with a client who has little or no understanding of the engineering terms when you put things to them.

'Negotiations become prolonged and frustrating.' He claimed that the client was also refusing to pay for legitimate design variations. 'As the only client in the sector nobody's willing to take Network Rail to court, so there's not much you can do.

This week the Civil Engineering Contractors Association con med that its members are unhappy about Network Rail procurement, saying that the client's staff lack vital industry knowledge.

Network Rail was unable to respond as NCE went to press.

Rail earnings Consultant Fees (£M) 2007 Fees (£M) 2003 Atkins 248.8 107.4 Mott MacDonald 86.4 45.4 Arup 64.1 75.1 Scott Wilson 46.3 25.3 Mouchel Parkman 459 (Mouchel) 4.1 (Parkman) Halcrow Group 36.5 24.3 WSP Group 30 20 Parsons Brinckerhoff 29 36 Amey Infrastructure Services 26.9 12.04 Jacobs 25.4 20.1

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