THE British government has confirmed that infrastructure manager Network Rail will place an approximate £500m order with British Steel for the supply of more than 337,000 tonnes of rail over five years. The deal is intended to secure the future of British Steel’s Scunthorpe plant, which entered government control in April, and first supplied rail to domestic customers in 1865.
The contract will commence on July 1 and will provide Network Rail with 80% of its requirement for 450,000 tonnes of rail across the duration of the contract. The government confirmed that Network Rail will also award smaller contracts for 80-90,000 tonnes of specialist rail products to other European manufacturers to ensure security of supply. These deals will be announced shortly, the government confirmed.
“We are committed to buying British where it makes economic sense to do so,” says Network Rail's group director for railway business services, Clive Berrington. “British Steel remains extremely competitive in the provision of rail and will remain our main supplier in the years ahead.”
The government stepped in to take over ownership of the plant in Scunthorpe, Britain’s last virgin steel production facility, after the previous owner, China’s Jingye Group, had reportedly confirmed its intention to shut down the blast furnaces immediately, jeopardising future production.
Berrington joined transport secretary, Heidi Alexander, in Scunthorpe to sign the deal on June 17.
"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,” Alexander says.
