Only 320 jobs out of 1,200 will be saved when Babcock takes over the bulk of Jarvis’ rail renewal work, Building understands

Babcock Rail is in talks with Network Rail over two track renewal deals worth a combined £30m a year until 2014 – Midlands and Continental and London North East – which became available when Jarvis collapsed in March.

But the transfer is being held up by wrangles over employment terms. The main sticking point is Babcock’s demand that Network Rail cover the pension deficit of any Jarvis workers Babcock takes on. About 100 of the 320 workers were in the scheme.

Another hitch is the RMT union’s desire for more of the 1,200 redundant workers to be taken on by Babcock, and for all to stay on their previous terms and conditions.

RMT general secretary Bob Crow said the potential job losses would be “another twist of the knife” for the former Jarvis workers.