The Transport Secretary has announced a five-year, 500 million GBP agreement between Network Rail and British Steel, safeguarding thousands of manufacturing jobs and supporting the continued operation of the Scunthorpe steelworks.
The deal, confirmed during a ministerial visit to the site, will see British Steel provide over 337,000 tonnes of rail track to Network Rail. The contract follows an emergency intervention by the Government in April, which aimed to prevent the closure of the site’s blast furnaces after British Steel’s owners, Jingye Group, proposed shutting down key operations.
Under the new contract, British Steel will supply approximately 80% of Network Rail’s rail requirements. Additional contracts for specialist products are expected to be awarded to European suppliers, covering a further 80,000 to 90,000 tonnes.
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 Plan for Change 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.
The announcement marks the first major public procurement initiative since Parliament passed legislation aimed at protecting steel production in Scunthorpe.
The Network Rail deal aligns with the Government’s broader Plan for Change industrial strategy, which includes a 2.5 billion GBP steel support fund. Officials say the plan aims to enhance domestic manufacturing capacity and ensure supply chain resilience across key sectors.
British Steel’s Commercial Director for Rail, Craig Harvey, said:We’re 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 represents a huge vote of confidence in 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.
The contract is set to begin on 1 July and will contribute to ongoing rail infrastructure projects across the UK. Further announcements regarding the remaining supply contracts are expected in the coming weeks.
