Network Rail and British Steel contract transforms Scunthorpe steelworks outlook

British Steel, the UK’s only manufacturer of rail, has secured a £500m long-term supply contract with Network Rail. The five-year agreement – with an option to extend for a further three years – means British Steel will supply approximately 80% of Network Rail’s rail requirements.

The rails procured through the new agreement will largely be used for maintenance and renewals and manufactured at British Steel’s Scunthorpe steelworks where most of the track laid in the UK is made. The contract follows an emergency intervention by the Government in April to prevent the closure of the site’s blast furnaces after British Steel’s owners, Jingye Group, proposed shutting down key operations.

Employees at British Steel’s site in Scunthorpe have been supplying Network Rail with track for more than 20 years, and in the last decade alone they have manufactured more than one million tonnes of rail for the UK’s network operator.

British Steel’s Commercial Director for Rail, Craig Harvey, said, “We are exceptionally proud to be extending our long-term strategic partnership with Network Rail with an agreement demonstrating British Steel’s importance to the UK’s economy and infrastructure.

“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.”

Transport Secretary Heidi 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.

“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.

“This crucial investment in our railway infrastructure shows we are delivering on our commitment to raise living standards in every part of the UK and ensure economic growth is felt by working people in our proud industrial heartlands.”

Business Secretary Jonathan Reynolds added, “This is great news for British Steel and a vote of confidence in the UK’s expertise in steelmaking, which will support thousands of skilled jobs for years to come.”

Clive Berrington, Group Director Railway Business Services at Network Rail, said, “British Steel remain extremely competitive in the provision of rail and we are delighted that they will remain our main supplier in the years ahead.”