Jarvis Staff Facing Job Cuts

About 1,100 jobs are to be cut at Jarvis by the administrators who are now running the rail maintenance firm.

Deloitte said that in the absence of further funding, it was not possible to continue operating parts of the group.

The redundancies will affect staff at the head office in York, as well as in Doncaster, Glasgow, Leeds, Newcastle and Peterborough.

Only the facilities management part of the group will continue trading as normal, a statement said.

There has been "a significant amount of interest" in this business, Jarvis Accommodation Services, Deloitte said.

The move means that Jarvis Rail, which is involved in rail engineering and Fastline, which supplies rail repair equipment, will cease operating.

Last week Jarvis, which employed 2,000 people, called in administrators after bank lenders refused further credit.

This followed the breakdown of talks with Network Rail over a proposal that Stan Herschel, regional organiser at the RMT union, said would have enabled the staff to continue rail renewal work.

Mr Herschel earlier told the BBC: "It is not as if extra money were needed. The contracts and the money for the work is already in place.

"We asked that Network Rail simply pay on time and underwrite the future work while Deloitte looks at the Jarvis business. If we don't do the work, someone else has to.

"The work must be done. It's a safety issue. The majority of the money Network Rail is spending on rail maintenance is, after all, taxpayers'." Mr Herschel said.

He said the RMT leadership was seeking an urgent meeting with Lord Adonis, the Transport Minister.

Last year, Jarvis's chairman, former Conservative MP Steven Norris, warned that a reduction in spending by Network Rail was hurting the company.

Network Rail rejected Mr Herschel's criticism. "We did not push Jarvis into administration. We are not responsible for their problems," said a Network Rail spokesman.

He added: "The maintenance work will be done, no question of that. It just might not be done by Jarvis. We have half a dozen similar contractors, and have no problem with them." Other contractors include Babcock and Balfour Beatty.

Network Rail is involved in a bitter industrial dispute with the RMT, with a strike planned for next week.

Jarvis came close to collapse in 2004 after running up huge debts on over-ambitious bids for Private Finance Initiative contracts.

The company had sold off several operations to concentrate on rail maintenance, leaving Network Rail as by far its biggest customer.

Posted at 01:57PM Mar 31, 2010 by Marc Stenton in Insolvency  |  Comments[0]