Contractor denies that it is to scale back track maintenance work in face of possible negligence claims.
Jarvis this week underlined its confidence in its rail division despite the threat of negligence claims after the Potters Bar train crash last month.

Financial director Robert Kendall said the firm had no intention of cutting back on investment in the rail business in the current financial year. He did say that the balance of the business might change, however, as the firm's accommodation services division grew.

Kendall said: "The rail division is an important part of the business and one in which we will continue to invest, and a business in which we are good at what we do."

He said that of the £12bn of work for which the firm was currently bidding, £3.6bn was taken up by rail and road infrastructure projects.

He added that the group was part of a consortium looking to secure major rail infrastructure projects, such as the Leeds Supertram scheme.

Jarvis reported pre-tax profit of £45.8m for the year ending 31 March, up from a restated £24.8m for the same period the previous year.

In reposting its results in this way, Jarvis followed the same path as rival PFI contractor Amey, which changed the way it accounted for PFI bid costs earlier this year.

By using the new accounting standard UITF 34, which says precontract bidding costs cannot be counted back as assets until the contract is secured, Jarvis was forced to reduce its profit by £5m.

The £5m reduction included £3.6m relating to the bid for the London Underground JNP Infraco contract to enhance the infrastructure on the Jubilee, Northern and Piccadilly lines.

Using the previous accounting method, pre-tax profit rose 69% from £30.1m to £50.8m. The City had been expecting a return of £47.3m.

In March this year, support services group Amey slashed millions of pounds from its profits for the past three years by introducing the accounting changes to its PFI bid costs.

Amey posted an £18.3m loss for 2001 when the City had been expecting it to announce a profit of more than £50m.


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