British Steel: £500m rail contract announced with Network Rail safeguarding thousands of jobs
A £500 million five-year contract for British Steel to supply rail track for the country’s railways has been hailed as the confidence booster that the sector needs.
In a visit to the Scunthorpe steelworks today, Transport Secretary Heidi Alexander announced details of the deal with Network Rail - the first major public procurement since the government intervened in April.
Following the collapse of negotiations with Chinese owners Jingye, the government passed emergency legislation to prevent the closure of its blast furnaces.
The last plant in the UK to make virgin steel, the Scunthorpe steelworks employs 2,700 people.
The contract, which starts on July 1, will see British Steel supply a minimum of 337,000 tonnes of long and short rail, protecting thousands of skilled manufacturing jobs.
The Scunthorpe plant has been producing rail for Britain's railways since 1865.
A further 80 to 90,000 tonnes will be provided by other European manufacturers “to ensure security of supply”, with deals expected to be announced shortly.
Gareth Stace, director general at trade association UK Steel, told The Yorkshire Post: “This is the boost in confidence, but also a clear sign of support from the government that British Steel and the rest of the sector need, given the difficulties that the steel sector has faced over recent years and this year with the rollercoaster ride of business uncertainty.
"With Trump’s tariffs, low prices, weakening demands and increases in imports, steel producers in the UK are looking for all the good news they can get.”
Imports rose to 70 per cent of UK steel demand last year which was “unsustainable”, he added.
Ms 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.”