CARILLION has been barred from bidding for any new contracts with Network Rail after a survey found that its workers were twice as likely to have an accident on its sites as those of other contractors.
The construction and rail engineering group is the first big contractor to be suspended from competing for work with Network Rail since the contracting regime was set up at the time of privatisation in 1996. Network Rail said that the suspension would be in place until Carillion showed a significant improvement in workplace safety on track renewal contracts. “They will be suspended until a trend of improvement is counted — that will be in months, not weeks,” a spokesman said.
Shares in Carillion initially fell, although the company said that the decision would have “no material effect on earnings expectations in 2006 or 2007”. The shares recovered to close up 2½p at 307¼p.
Network Rail said that a survey across all its contractors had found an accident frequency rate (AFR) of 0.25. Carillion’s figure was 0.5. An AFR of one means one accident per 100,000 hours worked. A spokesman for Network Rail said that some serious accidents had occurred on Carillion’s sites, including broken bones and serious eye injuries.
Carillion acknowledged that “less serious accidents” at its rail unit had risen between mid-June and mid-July, while it restructured its rail business, but it said Network Rail’s decision was “wholly disproportionate to our overall performance in respect of workplace safety”.