The diesel fumes hang acrid in the bright sunshine. They have drifted across
from the platforms that serve the East Midlands trains on the notorious
BedPan line to become concentrated under the glass roof at St Pancras.
This train shed was originally completed in 1868 by the engineer William
Barlow. The fumes, at stark odds with the superbly modernised station, are
clearly a personal affront to Rob Holden, the chief executive of London &
Continental Railways.
The company owns St Pancras, the high-speed lines that connect it with the
Channel Tunnel, the UK arm of the Eurostar train service which uses them and
chunks of land north of next door King's Cross and at Stratford in East
London.
The refurbishment of St Pancras and the creation of the lines to the Tunnel
were a £5.8billion, 11-year infrastructure project that, after some early
troubles, came in on time and to budget. One strains to think of another
such job completed so successfully. The Emirates Stadium, certainly, but not
the Dome, Wembley Stadium, the Jubilee Line extension ... the list of
botched huge construction works is a depressing one.
Mr Holden came on board when the scheme was started in 1996 as finance
director. Initial investors included National Express, Virgin and the
merchant bank then known as SBC Warburg.
The intention had been to float on the stock market perhaps two years later
and use this as the basis to fund the project.
That plan was derailed when it became obvious that the estimated revenues from
Eurostar were far lower than had been hoped. Much of this was down to the
arrival of low-cost airlines such as easyJet.
The project had been championed by Michael Heseltine and LCR came about after
the privatisation of British Rail. In 1998 it got a new champion, John
Prescott.
Apart from both serving as MPs, this is probably the only thing the two men
have in common. The necessary funds were found by the Government, and the
project was split in two.
The first job was to upgrade the lines from the Tunnel to take full use of the
186mph trains used by Eurostar. These would take the trains into Waterloo.
The second, more expensive and difficult phase, costing £3.9 billion, would
then be the necessary tunnelling and lines up from Ebbsfleet, north Kent,
into St Pancras instead.
This duly opened on November 14 last year, according to the timetable that had
been set ten years before.
The first “passengers” - daft health and safety rules mean they cannot be
described as such - had been carried on the new route last summer.
They were the Olympic evaluation team, back for a second visit to confirm that
the capital's transport links were adequate for the Games. In an earlier
visit two years before they had been driven through the new tunnels in a
fleet of Land Rovers.
“We're responsible for the Olympics in London,” says Mr Holden, with perhaps
understandable hyperbole. Will everything be ready for 2012? And will the
transport be up to the task? “
We will get it done on time - the issue will be the cost,” he says. “The
problem will be if people want to use their cars. The great British public
are loath to abandon their motor cars. That will be a big issue.”
He speaks, of course, as a railway man. It is hard not to detect the pride Mr
Holden and his team have for what they have achieved. But LCR is now in the
end game.
The plan is to sell the infrastructure, the lines and stations, with
Eurotunnel seen as a possible buyer. The property assets are being
redeveloped with various partners.
The coming of the Olympics means some changes at Stratford, to accommodate the
Olympic village for athletes that will then be refurbished for private
buyers.
The property assets could also be divested, but for the unfortunate downturn
in the market.
LCR is committed to sticking with this for some years to come. Eurostar UK,
which has a cumbersome, multinational structure, needs reorganising. But Mr
Holden concedes: “What I came here to do, and what I enjoyed doing, is at an
end.”
He has been linked to the chairmanship of Network Rail, replacing Sir Ian
McAllister, who has been there five years. He is too tactful to comment, but
the name of the headhunter involved comes easily enough to his mind.
Mr Holden is just one of 100 board members of Network Rail and is one of those
who have put forward a resolution at the forthcoming annual meeting to find
an alternative to this unwieldy corporate governance structure.
“While Network Rail has in many ways been successful, it now needs to move on.
Those 100-odd members have not been as successful in holding the Network
Rail board to account as the public and, dare I say it, the Government would
like,” he says diplomatically.
But he also reels off a range of other infrastructure projects that might take
his interest. The new Navy carrier programme, the renewal of Trident,
Crossrail, nuclear decommissioning ... “I come from defence. There's a lot
going on in defence.”
An unassuming Mancunian with a dry sense of humour, Mr Holden was indeed in
defence, and on the original Trident programme. But his first job was
helping out his father, who worked for an undertaker, in school holidays.
“I was unfazed by dead bodies.” Still, this was never going to be a career
option. “I always wanted to be an accountant - a bit boring, I know.”
He was taken on by Arthur Young in his native Manchester and found himself
working on the audit of the British Shipbuilders Corporation yard in
Barrow-in-Furness, on the North West coast. “In 1983 I went up on a staff
loan of four to six weeks and stayed thirteen and a half years.”
This time covered the privatisation by management buyout of the Barrow yard
and the Cammell Laird yard on the Wirral, which became the publicly quoted
VSEL, the initials standing for Vickers Shipbuilding and Engineering Ltd.
This was bought in 1994 by Lord Weinstock's GEC, then in its prime but
heading for disaster some years later under Lord Simpson of Dunkeld and
finance director John Mayo. “The day I left GEC was the day George Simpson
started,” he winces. This was in 1996, to join LCR.
Mr Holden says the refinancing two years later, and the decision to split the
project in two, was probably a blessing in disguise. “I think we would have
added to the long list of failed mega-projects in this country.
Building the railways in two sections helped us enormously. We did the easy
stage first, and learnt from it. I don't think we've got the skills sets in
sufficient quantities in this country to deliver the project in one go.”
He ascribes the project's success to having put down a good set of
specifications at the start. What can bedevil such work are changes of plan
en route, which increase costs and lead to disputes with contractors over
who should bear these - as anyone who has had a new kitchen fitted will
attest.
LCR also eschewed the normal “lump sum” contracting for a more flexible
approach whereby contractors were incentivised to keep within costs. This
meant a more harmonious, team-led process rather than the continual
wrangling that can mar other big infrastructure works. “People don't believe
it, but that's what actually happened. They built up trust,” he says.
“Nobody came into work thinking they were going to be exploited or taken
advantage of. Maybe some organisations didn't make as much money as they
would have from a more traditional approach.”
CV
1956: Born April 6 in Crumpsall, Manchester
1977: Joins Arthur Young
1983: Seconded to Barrow-in-Furness shipyard
1986: VSEL created by management buyout
1994: VSEL bought by GEC, becomes finance director, GEC Marine
1996: Finance director, London & Continental Railways (LCR)
1999: Chief executive, LCR
2004: Chairman, LCR, in addition; roles split in 2006.
Married, two children
