Jarvis quits track maintenance
Jarvis has announced that it is to move out of day-to-day railway maintenance due to concerns over profits and reputation.
Jarvis is one of seven firms with contracts for maintaining sections of railway, and maintains around a quarter of the rail network.
Around 15 per cent of the company’s revenue is derived from its track maintenance work, but it is willing to forgo this for commercial reasons. This led to an agreement with Network Rail, which will take the work in-house.
Three accidents in recent years have seen Jarvis affected by bad publicity.
One, involving the derailment of a freight train near Rotherham last year, led to the firm being charged in court. The company has also admitted that staff neglected to reset points after maintenance work at Kings Cross, where a train derailed this year.
By far the most high profile of the incidents was the Potters Bar crash, in which seven people died and 76 were injured. This was also blamed on faulty points, although Jarvis has maintained that this is not the fault of the company, and at one stage suggested sabotage was the cause.
More than three thousand staff will be affected by the decision. They will be transferred into the employment of Network Rail, and will be covered by TUPE legislation.
It is hoped the full transfer will be completed by the start of the new financial year, although discussions on how this will be achieved smoothly are ongoing.
The contracts affected are not the first that Network Rail has brought in-house, but it has not ruled out the possibility that another company may be able to run the maintenance work in the future.
It has been reported that Network Rail insiders are pleased at the news, and GNER, one of the rail operating companies using the affected track, has openly welcomed the decision, which it describes as good news for staff and passengers.
The news follows an upbeat trading statement ahead of interim results later this year. Jarvis suggested that it expects first half profits to be up on last year. It is also benefiting from its role in one of the consortiums involved in London Underground’s Public Private Partnership.
