This rise took place despite the fact that some City analysts were surprised by the low value of the contract. It had been thought that the deal could be worth £450m.
These questions were raised because the final contract negotiations will not be completed until the end of the year. Some City sources suggested that Railtrack’s announcement was brought forward to coincide with the Labour Party conference, where the rail operator is likely to be accused of underperforming.
The company is now defining the details of the project with Railtrack. This will include a decision on which of the parties should pay for the cost of haulage, and how.
Jarvis finance director Henry Lafferty rebutted suggestions that the £280m figure was low, pointing out that it does not include the cost of transporting freight and materials, estimated to be about £100m.
The West Coast line will be upgraded using a state-of-the-art machine that lays up to 800 m of track in eight hours. Jarvis has struck a deal with US firm Fairmont Tamper to supply a UK version of its P811F machine. It will begin trials this year before starting work in April 2000.