Construction firm Hercules Site Services has won a new contract to provide labour for a major rail project.
The Gloucestershire-based company has been awarded a five-year deal by the rail arm of infrastructure group Balfour Beatty, as part of work on Network Rail's £44bn ‘Control Period 7’ (CP7) programme.
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CP7 is a five-year plan for the railway in England and Wales, which will run from April 2024 to March 2029, and will see upgrades designed to tackle climate change and improve train performance.
Balfour Beatty Rail has been awarded major contracts during CP7 to deliver work on behalf of Network Rail, Transport for Wales, and London Underground. Hercules is one of six suppliers contracted to support on labour.
Bosses at AIM-listed Hercules said in an update on Monday (October 9) the agreement would see it launch a new division within its labour supply business, focused on the provision of specialist rail labour on live track to clients.
Chief executive Brusk Korkmaz said: "This contract provides Hercules with an exciting new revenue stream which has strong potential for continued growth. While we have previously provided personnel to deliver heavy civils and earthworks to pre-enable rail-based projects, this contract will see us recruit specialist rail labour on live track on behalf of a customer for the first time, opening up a wider range of opportunities for Hercules in the rail industry.
“Given that we have worked with Balfour Beatty Group for many years, this news also demonstrates our ability to grow our total customer value due to the quality of the services we provide.”
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He added that the government’s recent decision to scrap the northern leg of HS2 would have “no impact” on the company’s ongoing contracts for Phase One of the high-speed rail project between London and Birmingham.
Mr Korkmaz added: “Our work at this project continues to build momentum as we supply more contractors to site and with the launching of our new technical rail specialism, we are well placed to capture more value from future rail infrastructure projects."
Hercules’ latest deal comes after it secured contracts worth more than £3.1m relating to nine wastewater treatment and water management projects.
The business, which has its head office in South Cerny near Cirencester, saw gross profit jump by almost three quarters to £6.9m during the first half of its current financial year, as it ramped up labour supply to major projects such as HS2.