Chiltern revealed as Jarvis' contract win

The contract, which was announced without a name on Thursday, is for work on the mainline phase of Chiltern Railway's Project Evergreen 3.

Following a successful joint bid, York-based Jarvis Rail will be the subcontractor on the project and will work closely with principal contractor civil engineering specialists BAM Nuttall. The total value of the rail and civil elements of the mainline phase of Project Evergreen 3 is around 94m. The majority of the rail work will be undertaken in its financial year starting in April.

The contract also contains the option to extend the works, subject to relevant approvals, to cover the 96m upgrade of the Bicester to Oxford line which is due to start in April 2011.

The rail elements of this second phase could be worth an extra 36m.

Jarvis chief executive Stuart Laird said: "This is a huge opportunity for us and is testament to the effort we are putting into developing relationships with potential new partners and customers.

"We have worked very closely with the team at BAM Nuttall to provide Chiltern Railways with a comprehensive solution which draws on our combined experience in rail and civil engineering."

Adrian Shooter, chairman of Chiltern Railways said: "We are pleased to have engaged with companies of BAM Nuttall and Jarvis's experience and expertise to undertake Evergreen 3.

"Working closely with Network Rail, we are going to create a new mainline railway for the people of Oxfordshire and the Midlands.

"This deal demonstrates that real improvements to rail services can be paid for without public subsidy by attracting people out of their cars and onto trains."

Jarvis, which earns the bulk of its revenues from Network Rail, has been struggling through a fallow period after the government-backed body decided to defer spending on a 4bn portion of its track renewal programme.

Mr Laird said recently that the group is trying to offset this by winning new customers and contracts.

Analyst Andrew Nussey at house brokers KBC Peel Hunt said: "The contract is good news for sentiment after a very challenging 12 months for Jarvis.

"We have Jarvis down for group revenues of 234m for fiscal 2011 and we anticipate some growth within that, helped by this contract."