Bids ban could cost Carillion Rail £1.5m

Network Rail suspends contractor from bidding for work because of poor safety record.

Carillion Rail is likely to lose up to £1.5m if Network Rail's ban on it from bidding for new work extends into next year.

The contractor was unceremoniously suspended as a bidder last week because of failures in its accident record. Network Rail said at the time: "There is no single thing that has triggered this, rather a number of small workforce-related incidents over a period of time, which convinced us this was necessary."

The incidents are believed to cover a pair of four-week reporting periods between June and July, when seven incidents occurred that necessitated employee absences from work of more than three days. These included three foot injuries, the most serious of which was a broken bone caused when a driver jumped out of a cab on to ballast there were also two twisted ankles, one cut hand and a finger injury.

Up until then, Carillion's track record had been similar to other contractors, at around 0.25 incidents per 100,000 man hours, but the blip in the summer doubled that level to 0.5 per 100,000. It is understood Carillion's accident rate has now fallen to below 0.2 per 100,000, as it continues with its ambitious attempt to achieve zero accidents.

Network Rail said the suspension "will be months rather than weeks" and said it is not looking to make it permanent.

Carillion is smarting from the unexpected ban, which was imposed at short notice last week. The contractor said it feels the Network Rail action is "disproportionate" and remains committed to its Target Zero accident goal.

"We think what happened in the summer is a blip and are working hard with Network Rail to get the suspension from bidding lifted," a spokesman said last week.

Carillion Rail used to get 25% of its annual revenue from Network Rail - around £500m a year. But with recent changes, including the decision to bring maintenance in-house, that figure has fallen to £200m a year, while Carillion's turnover has doubled to £4bn. The contractor had hoped to bid for new contracts set to come out at the start of next year and worth between £30m and £40m a year.

[Contract Journal, 23 August 2006, p 4]