Home Business Balfour Beatty committed to 'core' track plant business

Balfour Beatty committed to ‘core’ track plant business

Balfour Beatty’s rail business has been making headlines across the national and specialist trade press in recent months.

The company has been slimming down in order to stay competitive in a challenging market and each new development has been played out in print.

In July, Balfour Beatty Rail announced the sale of part of its track plant and equipment (TP&E) business to Vp’s plant rental subsidiary TorrentTrackside – an announcement which became a little lost between briefings about discussions with Carillion over a potential merger, talks which have now come to an end.

Balfour Beatty Rail’s small tools business was sold for £5.5 million, including a five-year framework agreement to supply plant equipment to the company. The news was reported widely, but somewhat inaccurately, says managing director Mark Bullock.

‘We most definitely have not disposed of our plant business,’ says Mark. Although Balfour Beatty has sold its small tools business, it has retained the core part of its business, delivering track geometry services, road rail vehicles (RRVs), specialist plant services, rail grinding and seasonal treatment works.

Balfour Beatty’s rail plant business operates out of 15 sites in the UK and Ireland. The sale has seen 59 of Balfour Beatty’s 557 rail plant employees transfer to Torrent. Although the sale has reduced the overall size of Balfour Beatty’s offering, Mark believes it will allow the company to focus on developing its core business.

‘We have a successful rail plant business, and what we have done at group level is review all of our plant businesses.

‘There was a process where we started to look at which of the plant assets were core to the business. [It] concluded that whilst we most definitely wanted to focus on growing and developing the rail plant business, the small tools wasn’t core and strategic to us.’

Balfour Beatty has won a number of high-profile track plant contracts over the last 12 months. These include operating and maintaining Network Rail’s Multi-Purpose Vehicle (MPV) seasonal fleet, winning a five-year contract to operate and maintain track plant for Irish Rail (Iarnród Éireann) and being granted an extension to its four- year rail grinding contract for Network Rail.

Mark added, ‘We’re optimistic about our opportunities to grow that and we’ve been quite successful in the last 12 months in winning new work.’

There is still a lot of restructuring to  come across the rest of Balfour Beatty in the UK and overseas. Canadian- based WSP is now expected to acquire Parsons Brinckerhoff for US $1.35 billion, and although talks with Carillion were cancelled last month, the company is still looking for a buyer for its German and Italian rail businesses, having already sold its Scandinavian and Spanish assets.

Reflecting on the Carillion merger discussions, Mark said, ‘Basically that the board of Balfour Beatty considered the proposal from Carillion but decided that it wasn’t in the interest of the shareholders.’

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