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Rail systems skill shortage triggers CTRL costs hike

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NETWORK RAIL'S decision in 2003 to take maintenance and renewal work back in-house is adding millions to the cost of completing section two of the Channel Tunnel Rail Link (CTRL).

Managing director of CTRL client Union Railways, Alan Dyke, confi med this week that the resulting shortages of specialist private sector rail skills were contributing to cost increases on system-wide contracts.

carce resources coupled with recent increases in railway workload in the south east, he said, meant the costs to fit out the new tunnels and complete the railway were higher than expected.

'The cost of installing systemwide track, signalling, communications and power supply equipment on CTRL section two is spiralling, ' said Dyke.

'If I said that they had trebled, people wouldn't believe it. But yes, they have trebled.' Dyke confi med that the project's £3.3bn cost could rise as a result of these pressures.

But he maintained that, with 80% of the project complete and two years left on the programme, he was working hard with contractors to protect the overall budget.

'We will be within a few percentage points of our original budget, ' he said.

He accepted that this could mean costs rising by £200M, with a small risk the increase could rise by up to £600M.

'The project budget was set some time ago and we forecast in infl ation, ' he said. 'But infl ation in the UK's south east London railway construction industry is nowhere near (the anticipated) 2.8% - it is actually running at more like 9% or 10%.' Despite the CTRL's huge scale, the project is a small player in the UK rail market and is feeling the pinch as it is competes for resources with Network Rail.

The track operator decided in 2003 to take maintenance back in house, recruiting relevant staff from its contractors in the process (NCE 30 October 2003).

This has robbed contractors of the depth of specialist skills CTRL had planned to use for the system-wide contracts.

'Network Rail is not going to turn its ship around to help me, ' Dyke conceded. 'We are competing in a market place - if we want people to work at the weekend to do our track work, our contractors go to agencies that supply resources and they will go to whoever pays the most or is offering the easiest job.' Dyke said that although costs for the system-wide work had risen, the real threat was to the project programme as contractors became more selective about the work they took on.

'If we offer a high risk, high penalty, challenging job our costs go through the roof. But actually getting staff to turn out to do that work becomes difficult, ' he said.

CTRL has a number of prebooked track possessions with Network Rail to cover parts of the project which cross or connect with the national rail network.

Skill shortages could mean cancelling these possessions if contractors lack the staff to carry out the work.

'If we can't complete the work because of lack of resources we could lose three months on the programme because that is the next available opportunity to do the work, ' he explained. 'It will cost us perhaps £100,000 to pay the contractor to come back but losing three months on the programme might be worth tens of millions of pounds.'

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