Contractor warns of ‘uncertainty’ over Great British Railways plans

Babcock Rail is bracing itself for a lack of clarity on government plans to restructure the UK’s rail sector.

The contractor has been carrying out “regular reviews” on plans for a publicly-owned Great British Railways (GBR) company but said it considered government infrastructure policy as a “key uncertainty”. The comments were made in Babcock Rail’s latest financial accounts, published this week.

Former prime minister Boris Johnson first committed to setting up GBR in 2021 following the Williams-Shapps review, which recommended the creation of a new arms-length body to oversee rail.

As an arms-length public body similar in structure to Transport for London (TfL), GBR was set to oversee track and services across the UK, but transport minister Mark Harper refused to commit to to the project in December 2022.

Earlier this year, the Labour Party committed to establishing GBR if it wins the upcoming election. Labour said the new organisation would be led by rail professionals and industry experts.

“[It would also] be responsible for the day-to-day operational delivery of the railways, for ensuring infrastructure and services work together, and for innovations and improvements in the experience of passengers and freight users,” Labour added in a statement on its website in April.

In its accounts for the year to 31 March 2023, Babcock Rail said infrastructure economic policy and the availability of skilled and technical resource are other uncertainties that threaten the firm’s future financial performance.

The contractor returned to profit in the year to 31 March 2023, pointing to a surge of work on Northern Ireland’s Translink programme as it reported a pre-tax profit of £8.6m. A year earlier it made a loss of £767,000.

Babcock Rail’s turnover was also up, at £165.4m, compared with £145.8m a year earlier.

Babcock Rail was named on track and signalling and telecommunications frameworks with Translink, which it said delivered “significantly” higher amounts of work than before. The company took on £70m worth of work in the year, compared with £43m the year before, which it put down to programmes “increasingly progress[ing] from design to build and/or construction phases”.

In February 2022, the firm also scooped the systems contract for a major transport hub in Belfast on a Translink project worth £200m. A joint venture of Northern Irish firm Farrans and Madrid-based Sacyr is delivering the main contract.

Babcock Rail is also working on the Rail Systems Alliance Scotland framework for Network Rail, which it said “continues to operate well”.

The contractor’s cash pot nearly halved from £17.0m to £8.7m.

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