Network Rail is locked in discussions with unions on a pay deal to avert a crippling national strike.
The RMT union is understood to have held talks over an inflation-busting deal — putting the company on a potential collision course with ministers.
The negotiations come amid a febrile atmosphere in the transport sector. Unions brought many lines in the southeast to a halt last week in a row over safety and staff roles, with drivers from Aslef holding a three-day strike on the Southern route between London and the south coast that left about 300,000 passengers unable to travel.
Pilots from Virgin Atlantic are threatening to walk out over Christmas, as are British Airways cabin crew and baggage handlers at several British airports.
A Network Rail strike would bring the entire British railway network to a standstill. Analysts reckon it could cost the economy £200m a day.
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The company employs an army of about 37,000 staff, from signallers to engineers, who repair and upgrade the country’s 20,000 miles of track.
Last year the RMT threatened to bring the railway to a halt for the first time in two decades after workers rejected a four-year pay deal and voted for a strike. The walkout at Network Rail was narrowly avoided when unions agreed a two-year deal, but that agreement expires this month.
Industry sources said the RMT has asked for a pay settlement above the retail prices index (RPI) measure of inflation, which stood at 2.2% in November.
With Network Rail now classed as a public sector body after its £40bn of debt was taken on to the government’s books, that is likely to trigger a dispute with ministers.
Millions of teachers, nurses and council workers are facing pay cuts in real terms after being told their wages will rise by just 1% a year until 2020. The Bank of England thinks the consumer prices index (CPI) measure of inflation will peak at 2.8% in early 2018. The RPI typically runs as much as one percentage point ahead of the CPI.
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After a series of spending blow-ups, Network Rail is under heavy pressure to slash costs. It has a £38bn budget to spend between 2015 and 2019 but recently asked the government for more money as it faces a shortfall.
The pay talks affect about 25,000 operations and maintenance staff at the company. About 24,000 of Network Rail’s workers are paid between £20,000 and £40,000.
The company handed out £27.6m in performance-related bonuses last year, despite being criticised for sliding efficiency.
Network Rail said: “We are currently in the midst of constructive talks with our trade unions about a fair and affordable pay deal for our employees for the years ahead. Those talks continue, with both sides keen to reach an amicable agreement.”
The RMT said: “Pay negotiations with Network Rail are continuing through the normal machinery.”