Network Rail To Support British Steel

When it comes to the procurement of suppliers for railways, Network Rail plays an important role in the business landscape, for everyone from bearing replacement suppliers to steel manufacturers, especially British Steel, which collapsed into insolvency last week amidst financial problems, despite providing 95 per cent of the steel used in the UK’s rail tracks.

In what’s been a particularly difficult week for British Steel, Network Rail has put on a show of good faith in a continued partnership with the manufacturer, amidst claims that a good amount of progress has been made in finding a new buyer. Network Rail is just the latest figure from the rail industry to come out in support of the financially burdened steel manufacturer, however, this aid isn’t limited to just words.

According to Infrastructure Intelligence, Network Rail have outlined that they will improve their order with British Steel with immediate effect, and pay up front to help ease any crippling cashflow problems. A Network Rail statement explained that they had been working with the government and British Steel for many weeks to help solve the business’s financial difficulties: “British Steel is a major supplier to Network Rail, providing around 100,000 tonnes of rail a year and playing a major part in our plans to maintain, renew and upgrade the railway. We are confident that we remain able to carry out critical work on the railway in the coming months and beyond,” reads the statement.

Other speaking out in support of British Steel include the Railway Industry Association, which expressed that it stands by British Steel and its workers, and praised the steps that Network Rail have taken in helping the steelmaker to keep its head above water.

If British Steel is forced to close its remaining plants in Grimsby and Teesside, 5,000 direct jobs could be lost, while as many as 20,000 in the wider supply chain would be put at risk.

Politicians across parties have also spoken about the need to support British Steel, even if this means bringing it back into public ownership to protect jobs and the UK’s infrastructure system. Labour leader Jeremy Corbyn has spoken to say that even without a buyer, British Steel needs ‘support, not a death warrant’. If a buyer cannot be found, he believes the government must step in to take a public stake in the business to protect the steelworks as well as the workers and the local communities that would suffer from the loss of the business.

Tees Valley mayor Ben Houchen and other council leaders from Teesside have echoed that nationalisation, or else significant subsidy from public sources, should not be taken off the table.

According to the BBC however, British Steel may have as many as 80 potential bidders, and 60 of those have been sent non-disclosure agreements. This gives them access to further information which may help them to prepare bids. The official receiver has said that all offers of interest should be placed with them by early June.