British Steel secures £500m contract with Network Rail
British Steel has won a £500m contract with Network Rail in a deal that helps secure the future of its Scunthorpe steelworks.
The agreement will see British Steel supply up to 80,000 tonnes of rail per year to the body which manages the UK’s railway infrastructure, around 80 per cent of the track it needs.
All the rails will be made in Scunthorpe, which has traditionally manufactured most of the UK’s rail tracks.
Business Secretary Jonathan Reynolds said the decision was “great news” for British Steel and a “vote of confidence in the UK’s expertise in steelmaker, which will support thousands of skilled jobs for years to come”.
The future of British Steel’s two Scunthorpe blast furnaces was plunged into uncertainty earlier this year after the company’s Chinese owners refused to buy enough materials to keep them running.
The government took control of the business from Jingye in April, but it has not been fully nationalised.
‘Landmark’ deal for British Steel
“This landmark contract truly transforms the outlook for British Steel and its dedicated workforce in Scunthorpe, building on its decades-long partnership with Network Rail to produce rail for Britain’s railways,” Transport secretary Heidi Alexander said.
“After taking urgent action to step in and save these historic blast furnaces from closure, we’ve now helped secure their long-term future by backing British Steel with meaningful government contracts, protecting thousands of skilled manufacturing jobs in the process”, she added.
The group’s Scunthorpe site employs 2,700 people. It has supplied Network Rail with track for more than 20 years, manufacturing around 1m tonnes of rail in the last decade alone.
The agreement, which commences from 1 July, also has the option of a three-year extension.
“The contract is a ringing endorsement of UK workers and British industry, underpinning the vital role we play in ensuring millions of passengers and freight operators enjoy safe, enjoyable and timely journeys on Britain’s railways,” Craig Harvey, British Steel’s commercial director for rail, said.