British Steel on verge of administration: Impact on Network Rail?

Discussion in 'Infrastructure & Stations' started by jfowkes, 21 May 2019.

  1. jfowkes

    jfowkes Member

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    From the BBC (other news services are available):

    https://www.bbc.co.uk/news/business-48347371

    I note that in the article it says:
    If the British Steel were to go into administration how much would it affect the work of Network Rail?

    Just curious.
     
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  3. furnessvale

    furnessvale Established Member

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    A sudden collapse could cause a hiccup but there are a number of manufacturers in Europe who could fill the gap quickly.
     
  4. LNW-GW Joint

    LNW-GW Joint Veteran Member

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    One of the Scunthorpe successes in recent years has been their export of steel rail to France for their new high speed lines (finished at Hayange).
    It also generated useful Channel Tunnel rail traffic.
    The current difficulties are said to be export-related and might be about the French contract, in the light of Brexit uncertainties (timing, tariffs etc).
    The no-deal Brexiters should be careful what they wish for.
     
  5. superkev

    superkev Established Member

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    My thoughts entirely. I believe the EU which after all is a union has around a 40% tariff on non EU steel. Leave any union at your peril.
    Coincidentally I had a most excellent guided steam rail tour round Scunthorpe last Saturday. These are free, take 3 hours and must be one of the UK's best kept secret.
    See http://www.afrps.co.uk/
    Most impressive but sad to see so much deriliction and lack of investment with a lot of the site looking very old indeed.
    K
     
  6. HSTEd

    HSTEd Established Member

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    Assuming the Network Rail work is profitable, the administrators will probably run off a large batch of rails before they start shutting the plant down.
     
  7. superkev

    superkev Established Member

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    I believe some rail has to be shipped to France anyway for heat treatment or something as there industrial electricity is half the cost of ours.
    Clueless politicians I hate them all. Sorry for moan.
    K
     
  8. furnessvale

    furnessvale Established Member

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    I wondered how long before someone brought Brexit into a straightforward question about how NR could be affected by the loss of a UK based supplier.
     
  9. edwin_m

    edwin_m Veteran Member

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    It's fully within the scope of the thread as defined by the title. Not discussing it would be like debating why electrification is being cancelled without mentioning DfT.

    You can shut it out as much as you like, but the reality is that the prospect of Brexit is destroying real jobs and damaging real people, many of whom are in some of the areas that voted most strongly for it.

    Edit: I see someone has changed the title since I wrote this, to refer only to the effect on Network Rail. I don't see why my view should be suppressed here so I'm leaving this post but will post something on the referendum thread too.
     
    Last edited: 21 May 2019
  10. Maurice3000

    Maurice3000 Member

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    If they collapse the administrators will probably try and sell of the bits that are still profitable and not impacted much by Brexit. That could include rail for NR.

    The problem may be that it might be hard to run a profitable business when exporting becomes harder post-Brexit. Is a dedicated plant for producing long products solely for domestic consumption viable?
     
  11. Altfish

    Altfish Member

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    They could nationalise it.
     
  12. jfowkes

    jfowkes Member

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    OP here, just to say it wasn't me that changed the thread title! I don't really personally mind where discussions lead as long as it's interesting and civil.

    But moderators opinions may differ.
     
  13. kevconnor

    kevconnor Member

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    Is there much freight workings still generated by steel?
     
  14. Bald Rick

    Bald Rick Established Member

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    The trouble is that blast furnaces are chunky bits of kit. You can’t sell half of one.
     
  15. DanDaDriver

    DanDaDriver Member

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    Yes, and then we can have the uproar every time then government spend money on something that isn’t the NHS.
     
  16. Train Maniac

    Train Maniac Member

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    Still usually twice daily down here in Kent :)
     
  17. lincolnshire

    lincolnshire Member

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    British Steel gone bust then as just been reported on Radio Humberside at 10-15.
     
  18. Maurice3000

    Maurice3000 Member

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    Obviously, they could cut them up for melting into rail ;)

    I was not actually referring to bits of the plant but bits of the operation. If the part of the operation that produces rail for Network Rail is still viable because they have a long term domestic customer then that might get sold on. Meanwhile the operations that were only viable in a time when they could still easily export would go into administration.

    That would leave the challenge of some of the rail making process taking place in France. Brexit would raise the cost of doing that and would require the industry to calculate whether to absorb those costs or whether it's cheaper in the long run to build such a facility in the UK.
     
  19. DarloRich

    DarloRich Veteran Member

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    are you sure? How quickly? Where form?

    Because that is what has caused British Steel to fail and is what will result in uk taxpayers paying more money to buy rail from your European suppliers who can step in at the drop of hat and supply the type, volume and quality of rail to replace that lost at Scunthorpe.

    way to trivialise c.5000 people, several of who are members of my family, possibly losing their jobs. Thanks.

    and they are not things that can be turned on and off willy nilly. We went through all this at Redcar.
     
  20. pdeaves

    pdeaves Established Member

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    Keep things in proportion. Whilst I understand concerns for family futures, etc., I don't think Maurice3000 was trivialising any human impacts whatsoever, just looking at a way an administrator could dispose of assets in an obviously lighthearted way. I mean, if you cut up a blast furnace to recycle the metal into rail, with what do you melt it?
     
  21. DarloRich

    DarloRich Veteran Member

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    Fine. I am sorry if that came across as harsh. 800 jobs at risk on Teesside at Lackenby and Skiningrove in areas of already very low employment. Many more at Scunthorpe. I don't know Scunny well but expect the economic results of closure would be disastrous. God knows how many more in the supply chain. Lets also remember that for some of us this is very close to home.
     
  22. hwl

    hwl Established Member

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    About 20k in the supply chain.
     
  23. Bletchleyite

    Bletchleyite Veteran Member

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    It also risks further rise of the far-right parties. Nationalising it would at least make people hate the Tory Government less.
     
  24. A0wen

    A0wen Established Member

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    Maybe so - but there is massive over-capacity in the global steel market, not just the European one and it's not just the UK which has seen plant closures:

    https://www.telegraph.co.uk/finance...pe-as-Arcelor-Mittal-shuts-Spanish-plant.html

    https://www.independent.co.uk/news/...dustry-is-in-crisis-and-why-the-a6701111.html

    The problem is in part China which has (i) a huge capacity and (ii) is selling below cost. There's little justification for keeping unprofitable steel plants working in the UK, unless there's a clear way they can be made profitable. And in the remaining parts of British Steel that's highly unlikely. British Steel has been in decline for over 40 years, don't forget it was the Callaghan government which instigated the review of the then BSC that resulted in the closure of Corby and Consett steelworks - many try to blame Thatcher for those, but they are incorrect and in reality they would have closed regardless of who won the 1979 election.
     
  25. Mag_seven

    Mag_seven Established Member

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    When the Scottish steel industry was decimated we were told that market forces cannot stop at Hadrians Wall. Well in this case, market forces cannot stop at the Humber Estuary.
     
  26. 433N

    433N Member

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    Whilst I understand the arguments in economics, it's seems bonkers that in a week when we have had highlighted the national security concerns surrounding Huawei as part of our infrastructure, we seem happy to import all our steel from China.

    In the event of a war, are we going to be asking China for steel to build hardware ? Let's hope we are not at war with China or any of its friends, eh ?
     
  27. A0wen

    A0wen Established Member

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    Because the next time there is a war, it's highly unlikely to be fought using "conventional" weapons.

    A cyber-war is far more likely and that won't need steel. If it's not a cyber war then it will probably be nuclear. The days of sending men into battle armed with a machine gun are largely long gone.
     
  28. LNW-GW Joint

    LNW-GW Joint Veteran Member

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    Network Rail says it has enough rail stockpiled that it does not expect to be affected if British Steel stops production.
    There is huge oversupply of steel at the moment, partly because of the US-China trade war.
     
  29. 433N

    433N Member

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    Well, you're entitled to your opinion but I think you'll find that you are flying in the face of every bit of warfare since Nagasaki (including wars in Iraq and Afghanistan this millenium).
     
  30. Clip

    Clip On Moderation

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    Lets be honest though - its obvious the company wasn't in good health before brexit which is why it was sold on for a nominal £1 to venture capitalists who have made some investment into the plant itself with something called the wire rod line. Full story here https://www.ft.com/content/f0db2cee-8a67-11e8-bf9e-8771d5404543

    2 things - if the company does go under what about their french and Dutch workforce too and also what about that insurance claim - has it been paid? If not why cant the govt give them the money in the hope that they will get the money back via that claim?

    Tis a sad day yet again but theres many factors too this
     
  31. option

    option Member

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    Some of the heritage railways had been buying new rail from BS.
    So will they now buy from abroad, or will there be more competition for second-hand NR rail, which there may be less of because rail quality has been going up for a long time.
     

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