Laing to bid for more rail business

CIVIL engineering group John Laing is to bid for new regional rail franchises and broaden its investment in public sector infrastructure projects.

The company highlighted the success of its Chiltern Railways franchise as evidence of what else it can do in the transport arena.

Chiltern, which runs trains from London to Aylesbury and Kidderminster, increased passenger revenues by 13% in the second half against the same period last year. It said the franchise ran more than 91% of trains on time and was on schedule to achieve commitments including the completion of a new train depot at Wembley by June.

Laing, which is also involved in building schools, hospitals and roads, said the capital value of all the preferred bidder schemes in which it is involved now stands at £1.8bn.

The company is currently shortlisted on a further 18 projects with an estimated combined capital value of £2.6bn. It said the outlook for Private Finance Initiative (PFI) and Public Private Partnership (PPP) work remained strong.

Laing has reshaped itself after offloading Laing Homes and its troubled construction arm in 2002, following two straight years of losses. It now develops, funds and runs big infrastructure projects in the UK and overseas including hospitals, schools, police stations and roads in the PFI and PPP markets. In August, the group said profits in the six months to June 30 more than doubled to £13.1m from £5.4m a year ago.

The company remains in dispute with London Underground relating to responsibility for delays in introducing a new network-wide radio system on the underground railway network, which resulted in a first half loss of £1.1m in its utilities and airports arm against profits of £800,000 a year ago.

Separately, rail safety inspectors have closed a stretch of 100mph track on Britain's busiest railway line has been shut after discovering faulty repairs on the line by construction group John Mowlem. A catalogue of dangerous faults were found on the section of track near Watford, Herts.

Sections of rail on the West Coast Main Line were out of line, clamps were missing, bolts not properly tightened and sleepers were twisted. Nearly 100 trains including dozens of passengers services passed the spot for 12 hours before the faults were discovered.

Mowlem, the firm which carried out the track relaying work, has been suspended from the £25m contract while Network Rail investigate. Experts said it was a miracle that there had not been an accident like Potters Bar in 2002, where seven people died and 76 were injured.

Bob Crow, general secretary of the RMT rail union, said: 'This is a disgrace, safety should come first. Only some decisive action by railway professionals, and a good slice of luck, prevented a potentially massive accident.'

Labour MP John McDonnell said that the industry should be brought back in to public ownership. He said: 'How many more passengers will have to be killed by this disgraceful fragmented system before the Government acts?'

Mowlem began working on 8 January on the section of track at Bushey Bank, 16 miles from Euston station. They finished at 5.30am on 10 January after signing the job off as 'fit for purpose'. Twelve hours later after 96 trains from Euston had passed the spot, a driver reported a 'rough ride'. Staff at Watford immediately shut the line, which is used by Virgin trains and Silverlink services as well as freight trains. Mowlem's profits for last year are expected to be about £30m.