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Last Updated: Friday, 10 October, 2003, 15:50 GMT 16:50 UK
Jarvis's double railway trouble

By Tom Symonds
BBC transport correspondent

It is the sharp end of the railway business.

Daily maintenance - fixing things that go wrong, and trying to stop things going wrong, is dirty work, and if it does go wrong the effects can be catastrophic.

Jarvis has realised this, and decided enough's enough.

Of the two reasons the company has given, Jarvis has made most of its business concerns.

Potters Bar rail crash
The risk to the company's reputation that something might go wrong now outweighs the financial benefits of it going right

Despite making a 12m profit on rail maintenance last year, it says times are going to get harder, and profits will trundle away like a slow train on a branch line.

Executives are being a little more reticent about the other reason.

The risk to the company's reputation that something might go wrong now outweighs the financial benefits of it going right.

Jarvis's problem dates back to the failure of a single set of railway points, on 10 May last year.

The Potters Bar crash killed seven people.

Loose bolts were quickly found lying on the track next to the points, which had broken apart when a train passed.

The police and safety investigators have yet to conclude that Jarvis was responsible, but Jarvis was responsible for maintaining the points, and the investigators have not pulled their punches.

Law of averages

In May this year a report by the Health and Safety Executive said the points "had been poorly maintained and were out of adjustment in some respects.

"Other sets of points in the Potters Bar area were found to have similar, though less serious, maintenance deficiencies, indicating a wider problem."

Jarvis suggested the crash could have been the result of vandalism - a belief so far dismissed by the police.

Jarvis, one of the first companies to be presented with the new contracts, has decided they are unlikely to generate profits
The company's second big problem came last month when an intercity train leaving Kings Cross station strayed onto a section of track that was under repair.

Parts of the rail were missing, and the train derailed.

Jarvis quickly admitted someone had failed to ensure a crucial set of points was fixed to divert the train away from faulty track.

As an engineering company Jarvis carries out 25% of day to day maintenance - more than any other company.

So by the law of averages, it is more likely to suffer a derailment because of poor workmanship.

But the concerns about standards have prompted Network Rail, the custodian of the track system, to carry out an inquiry.

It hasn't concluded yet, and Jarvis's decision to get out of maintenance may well have pre-empted a decision to throw it out.

New contracts

But the businesses concerns shouldn't be forgotten in all this.

When Network Rail took over a year ago it quickly became apparent that since privatisation the cost of doing rail maintenance had spiralled.

If anything, things have got worse this year.

The problem is that for maintenance, whole sections of the network are currently handed over to private contractors who in many cases make their own decision about what needs to be done.

For now Network Rail will take over Jarvis's workload, and its workforce of 3,500 track engineers
There is an incentive to find more work to do, and make more money.

Major track replacement projects, which Jarvis will continue to contribute to, are handled differently.

Network Rail decides what work needs to be done, and searches for the lowest bidder.

This pushes down costs, but it also depresses profits for the engineering firms.

They have been told maintenance contracts will controlled in a similar way in future, and Jarvis, one of the first companies to be presented with the new contracts, has decided they are unlikely to generate profits.

So for now Network Rail will take over Jarvis's workload, and its workforce of 3,500 track engineers.

That's been welcomed in several parts of the rail industry.

As one senior official put it: "It's a bit rich of Jarvis to complain about damaged reputations, when Jarvis has done much damage of its own to the railway's reputation."




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