Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

In-house work doomed to fail say contractors

PLANS TO cut rail maintenance costs by £300M by taking work back in-house will fail, contractors said this week.

Network Rail believes costs can be reduced to £1bn in three years.

But many contractors disagree. One told NCE: 'The biggest way of cutting costs is by reducing the labour force, but rail maintenance is a labour intensive industry.'

He added that eliminating the contractors' profit margin could make immediate savings of up to £60M, but there was little else which could account for the remainder.

Another industry source said that they didn't believe that Network rail was organised enough to deal with the task of 18,500 new employees and over 31,000 km of track.

Other contractors believe that British Rail style 'low productivity' will return to the industry.

Network Rail this week claimed that central bulk purchasing of items such as ballast and reviewing maintenance cost variations across contract areas will account for some of the savings.

'There is about 60% variation in unit costs for maintenance between adjacent contract areas, ' said a Network Rail spokesman.

Other savings will come from standardised processes and better use of possessions. Contractors warned of hidden costs in transferring staff and plant back to Network Rail.

Armitt would not comment on the costs to carry from the reorganisation: 'I know how much but I'm not prepared to talk about it.

'But we will see the savings coming through very soon, ' he said.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.