ENGINEERING companies Balfour Beatty and Carillion will help to modernise the UK rail network after winning two track renewal contracts.

The groups have agreed five-year deals with Network Rail and will begin work to upgrade sections of track, switches and points on key rail routes this month.

The success comes two weeks after rival Jarvis was awarded two track renewal contracts covering the area of the train crash in Potters Bar, Hertfordshire.

Jarvis will be responsible for renewals of track and points in the London North East region, including the site of the May 2002 Potters Bar crash, in which seven people died and 76 were injured.

Network Rail decided to take its rail maintenance work in-house last year in a move that led a number of engineering firms, including Carillion, to issue profit warnings.

But it has continued to offer contracts to engineering companies to help rebuild the UK's rail infrastructure.

Under the contracts, Balfour will renew track, switches and crossings across the Southern region and in east and west Anglia, including north-east London.

The contract is estimated to be worth £113m in its first 12 months and more than £500m over five years.

Carillion will be responsible for renewing track in the West Midlands and upgrading switches and crossings in the West Midlands, North-West and Great Western Region in a deal worth about £50m in its first year.

Its contract for switches and crossings renewals on the West Coast mainline - worth about £15m a year - will continue as planned.

Both contracts with the engineering companies can be extended by Network Rail for a further five years if the work is carried out satisfactorily.

Mike Welton, Balfour chief executive, said: "We look forward to working with Network Rail in improving the efficiency of renewals delivery and helping to deliver a safe and efficient railway."

Paul Kirk, managing director of Carillion Transport, said the contracts reflected the company's absolute focus on safety, quality and performance.