Network Rail faces competition probe

Network Rail's attempt to streamline its number of labour suppliers has hit the buffers after one welding contractor reported the operator to the Office of the Rail Regulator (ORR).

The agency-supplied contractor, which cannot be named, told the regulator that Network Rail was breaching competition laws and should be fully investigated for bad practice.

Network Rail is aiming to reduce the number of labour suppliers used in-house and by other contractors by 85% by the end of the year.

The rail operator told CJ that it had only just sent out letters to companies warning them of how the selection process would be made.

Problems with the streamlining became evident recently in the operator's response to the ORR's third consultation on the rail industry.

"Network Rail admitted that initiatives to rationalise the number of specialist labour suppliers "had met resistance".

When approached, a Network Rail spokesman said the selection process was now in place, although no progress report could be made on the numbers achieved so far.

He refused to disclose details of the selection process. "I don't think it is unfair to want the best people doing the right job on our network," said the official. "We have no concerns about our methods of selection."

A source from ORR told CJ that it took the allegations very seriously and would now decide whether further action would be taken against Network Rail.

"This is only the second time we have received a complaint under the Competition Act," said the source. "This is a serious charge which will need consultation with the Office of Fair Trading. A decision will be made in the coming months."