contracting - jarvis jumps the rails
WORKERS, NOVEMBER 2003 ISSUE
Jarvis has pulled out of its contracts to maintain the railways in three areas, including the East Coast Main Line. The staff will transfer to Network Rail early in 2004, with the work being done in house.
This follows a recent derailment of an express passenger train as it left London's King's Cross station, where Jarvis apparently repeated errors that had led to another derailment near Rotherham.
The rail unions have welcomed the fact that nearly half of all rail maintenance will now be done by staff directly employed by Network Rail. They say using contractors is more expensive and undermines safety.
Jarvis says it was a commercial decision. Its reputation is in tatters after a string of incidents, and it is finding it hard to win non-rail contracts. Network Rail is putting a different spin on things, saying that Jarvis "jumped before they were pushed".
Both versions are probably true. Jarvis came into maintenance when it was highly lucrative, but Network Rail has put a stop to this particular gravy train.
Jarvis calculates that it can make more money from government-inspired local authority and other public service contracts on offer, although it has also been forced to withdraw from Southwark education services. Its share price rocketed after it announced its withdrawal from rail maintenance.