Carillion and First Engineering blast Network Rail

Rail contractors have used the current consultation document on the rail regulator Tom Winsor's review into rail spending to voice their anger at Network Rail's decision to bring maintenance contracts in-house.

Speaking out publicly for the first time, both Carillion and First Engineering have argued in their submissions to the regulator that the decision would not provide any added benefits.

First Engineering's new chief executive Janette Anderson wrote: "The issue of taking contracting in-house is not supported by First Engineering as we believe we are best placed to deliver an efficient and economic service based on our knowledge and experience."

Carillion Rail's managing director Paul Kirk gave a more diluted response by stating that Network Rail's current improvement teams, focussing on performance and productivity, "have highlighted many opportunities, many of which are not new".

He added that the rail operator's target of a 20% reduction in costs "was unlikely to be met due to the current risk adverse nature of the company".

The contractor wants to see a reduction in the volume of renewals outlined by Network Rail in its 2003 Business Plan but an increase in the current rate.

This is a move away from Winsor's aim to substitute renewals work for maintenance in a bid to reduce costs by £1bn to £5bn next year, falling annually by £4bn until 2008.

In its response, Network Rail argued that short-term reductions would lead to longer-term costs as changes to work plans for 2004/05 would lead to abortive planning costs and wasted possessions and would have a "adverse impact" on unit costs in 2004/05.

The operator also warned that a lack of renewals work would increase the incidence of broken rails, particularly at boltholes in jointed track. This, it argued, presented a higher risk of derailment.