After the tragic crash at Potters Bar, can the rail contractor responsible for maintaining the track regain its reputation in the City – even if exonerated by the HSE?
How many more sleepless nights does Paris Moayedi, chief executive of Jarvis, have to endure? The contractor's future hangs in the balance while the rail industry awaits the Health and Safety Executive's report on the causes of the Potters Bar rail crash. Jarvis was responsible for track maintenance on the line and if found negligent risks losing both its rail business and its position as a PFI partner.

In the aftermath of the accident, the City assumed the worst. Jarvis's share price lost almost half its value, partly over fears that the company could soon be facing expensive corporate manslaughter charges.

Jarvis's position is made particularly vulnerable by its reliance on rail. It is Railtrack's leading rail maintenance contractor with 21% of the market – and rail infrastructure accounts for 49% of Jarvis's turnover.

In an attempt to boost confidence in the markets, Jarvis this week made a vigorous defence of its maintenance record at Potters Bar. In a statement to the stock exchange it said that it had inspected the points "in accordance with a regime agreed with Railtrack" and had used qualified engineers. It also said that missing nuts and evidence of tampering to a bar holding points in place suggested sabotage rather than negligence on its part.

Aslef, the train driver's union, took exception to Jarvis's account, claming that the contractor was more interested in propping up its share price than finding out how seven people had died. Jarvis insists that its sabotage theory is valid, and the HSE has not yet ruled this out.

Stephen Byers took a neutral line on the sabotage allegations, and said it was too early to speculate on what may have happened. At Aslef's annual conference he focused on rail contracting and backed Network Rail's call for rail maintenance contracts to be extended from five to 10 years. Byers also called for a new relationship with contractors based on best value rather than cost, and a drive to tie financial rewards and penalties more closely to safety.

According to rail regulator Tom Winsor, Railtrack is already bringing in more stable, long-term contracts. Winsor said that contracting out maintenance is not inherently unsafe, and he pointed to other safety-critical industries that use specialist contractors, such as nuclear power and civil aviation.

Whatever the outcome of the HSE's report, it looks as though Railtrack, and its probable successor Network Rail, will continue to contract out rail maintenance. But it could be more costly. Unless Railtrack claws back more responsibility, contractors will demand higher margins to compensate for the risk of being found liable for the next rail catastrophe.