06 January 2005 | David Arminas
Network Rail has denied reports that it plans to bring track renewal in-house after a similar strategy for maintenance made savings.
The sole owner of the UK's rail lines announced last month that it had cut its annual maintenance bill from £1.3 billion to £900 million after taking over track repairs from seven companies last July.
A Network Rail spokesman said 16,000 maintenance staff, 5,000 vehicles and 600 depots were taken back as part of the deal.
"But there are no plans to bring back any track renewals in-house," he said.
After suffering severe criticism over recent fatal rail crashes, Network Rail laid the blame on poor maintenance work and decided to bring the £1.3 billion-worth of contracts back in-house from October 2003.
However, taking back renewal work may not have been totally ruled out, according to Les Mosco, a former Network Rail supply chain director.
"I always thought there was a good case for insourcing at least parts of both maintenance and renewals," said Mosco, who left Network Rail in October 2003.
"It appears to be very successful in bringing track maintenance in-house, so I would expect it to consider renewals, especially as most of the contractors are the same.
"Why not bring renewal in-house, not pay a contractor's profit margins and have more control over the work?"
The contractors generally worked only for Network Rail, he added. If these resources were in-house, Network Rail could use them more efficiently for other work as well.
But it could be a few years away, Mosco said, as five-year renewal contracts were let only about 12 months ago.
The final decision could depend on the renewal contractors demonstrating added value as part of their work.
"If not, Network Rail has shown it has the ability and determination to in-source [with maintenance]."