Strikes cost Network Rail construction projects £50m

Network Rail is set to lose £50million on construction work it cannot carry out due to planned rail strikes, according to its chief executive.

Speaking to reporters today, Andrew Haines said the money was made up of sunk costs which he would not be able to recoup.

He explained that much of the money has already been committed to hire private sector labor to carry out renewal works which will now be cancelled.

Haines said: “We’re going to lose most of this weekend [construction] work. We will lose around £50m this weekend.

Tens of thousands of railway workers are set to take industrial action today, as well as later in the week (Thursday and Saturday) in a dispute over pay and job security.

Construction chiefs voiced fears last month over the effects of the action – billed as the biggest rail strike in 30 years – on major projects that rely on trains for vital resources.

A Network Rail spokesperson confirmed Building News that it had been forced to postpone work initially planned for the coming days.

They said: “Very little engineering work will take place this week. This [is] due to a combination of staff on strike for actual work, as well as lack of network availability preventing engineering trains from getting to [the] to place.

“We had to delay some work that would normally have taken place this week.”

On strike days, Haines said the network will operate at 40% capacity, operating for 11 hours between 7:30 a.m. and 6:30 p.m., due to a lack of signaling personnel.

He added that freight services would operate at higher than normal capacity on Wednesday and Friday in a bid to help compensate for the heavily reduced service on Thursday and Saturday.

But the Network Rail boss said many construction companies have accepted they will have to wait for scheduled deliveries.

Haines said: “[For] more [of] construction activity is not like [the materials] need to be there today. Especially if you have this limited number of days and some people say, “I’d rather not be on the network if I can’t log in by 7:30 a.m. and have to leave at 6:30 p.m., and I end up with my asset blocked in the wrong part of the country”.

“It’s a real conversation about what works for the customer.”

Network Rail timetable planners have spent the last week creating a special template for dates affected by strikes. Some freight trains will have priority over passenger services during this period and will be given daytime slots, it is understood.

The Construction Leadership Council’s Product Availability Task Force recently raised “concerns” about the impact of the strikes.

“This will affect aggregate and concrete deliveries to key infrastructure products, underscoring the need for government to prioritize [the] transportation of building materials,” the group said in a statement at the end of May.

Union bosses have warned of “months of disruption” if demands are not met.

The Department for Transport insisted it had contingency measures in place to prioritize critical deliveries, but declined to go into specifics. “Rest assured construction is on the priority list,” a spokesperson said.

Last month, NC reported that Network Rail had saved over £1 billion through various litigation avoidance measures, significantly reducing the number of claims it handles.

Alice F. Ponder