Network Rail has signed a £500m ($678.8m) contract with British Steel to supply more than 337,000 tonnes of track over the next five years.
The contract, effective from 1 July, is expected to safeguard thousands of jobs at British Steel’s Scunthorpe plant.
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The partnership between Network Rail and British Steel builds upon a longstanding relationship with the Scunthorpe plant, which has produced rail for the UK’s railways since 1865.
Transport Secretary Heidi Alexander confirmed the deal during a visit to the Scunthorpe steelworks.
Alexander said: “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.
Network Rail Railway Business Services group director Clive Berrington said: “We are committed to buying British where it makes economic sense to do so and British Steel remain extremely competitive in the provision of rail and will remain our main supplier in the years ahead.”
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By GlobalDataThe contract with Network Rail, which will meet 80% of its rail requirements, is a component of the government’s £2.5bn steel fund designed to rejuvenate UK steel production over the next five years.
It also forms a part of Network Rail’s broader strategy to procure almost 450,000 tonnes of rail for the next five years.
To ensure a consistent supply, Network Rail will also engage with European manufacturers for additional contracts to supply specialist rail products.
These contracts will complement British Steel’s commitment by providing an additional 80,000-90,000 tonnes of rail.
British Steel commercial director for rail Craig Harvey said: “The contract represents a huge vote of confidence in 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.”
The UK government recently announced a reduction in the minimum age required to begin train driving careers from 20 to 18, aligning the UK with other European countries and addressing staff shortages in the rail industry.
