Simon Kirby left his role as chief executive of HS2 at Christmas, moving on to become chief operating officer for Rolls-Royce worldwide. This ended a thirteen and a half year career at the head of Britain’s railways, first for Network Rail and latterly for HS2, so Rail Engineer visited him before his departure to get his thoughts on the progress that the industry has made in that time.
The first surprise was that Simon had worked on the railways before. He joined British Rail as an apprentice in 1981, at Horwich in Lancashire, in what he now calls the “dark end of British Rail”. The site closed after two years, and young Simon was made redundant. He went to work for a fire engineering company after that, and then went to Liverpool John Moores University to study Mechanical Engineering.
Looking back on it today, Simon is struck by the difference in the industry in just his career lifetime.
“British Rail Engineering, BREL as it was at the time, was hugely downsizing. It’s fascinating how the industry’s gone through that era, when rail was on the decline, a secondary mode of transport that would get phased out by the car, to privatisation when it is now growing at three to four per cent per annum and we’re talking about High Speed 2 and lots of other major investments.”
From university, Simon went to Vickers Shipbuilding and Engineering (VSEL), and thence GEC Marconi and BAE Systems, before returning to his rail roots by joining Network Rail in 2003.
By that time, Network Rail had been in existence for about six months, following the collapse of Railtrack.
“I joined at the time where it was about building confidence, restructuring and configuring the organisation for the future,” Simon recalled. The industry had gone through a tough time, and there was a very real confidence issue across the board, which Network Rail had to address.
It was also a time when there were very few major enhancements to the network underway – it was mainly renewals. Simon was brought in to bring life to the enhancements programme.
A few projects were already under development – King’s Cross, Thameslink and FTN/GSM-R for example. But there was much more to do.
“Through CP3 into CP4, enhancements grew massively and projects such as Birmingham New Street, King’s Cross, Thameslink, Airdrie to Bathgate quickly came through,” Simon remembered. “Because of the increasing need for more capacity on the network, when you’re growing at three to four per cent per annum, you have to get more capacity, which is still the case today. I can’t think of a more successful industry over the last 15 or 20 years in terms of growth. Meeting that demand is clearly a challenge but, compared to where things were around privatisation, I think the industry’s in a really good place.”
“I was brought in to look at how to deliver capital projects. Some renewals are almost heavy maintenance, but a lot of renewals projects are really no different to an enhancement project in terms of physical activity. So I was brought in to look at the organisation. In those days Network Rail became a very centralist organisation, so we had a central renewals organisation that we created in about 2005 or 2006, and in 2008 we took on the whole of the rail portfolio.
“When you look back, the organisation demonstrated some significant increase in capability – I think it doubled its size. Clearly, managing growth has been a major challenge for them over the last few years but, by the end of CP4, Network Rail delivered £5 billion of renewals and enhancements that year. It delivered some major resignalling schemes and, while projects like King’s Cross Station, Birmingham New Street and Reading were obviously delivered in CP5, much of the work was done in CP4.”
Feast or famine
One of the problems faced by Network Rail, and its contractors, was the lack of orders coming out of the system at the changeover between control periods. Between CP4 and CP5, very few contracts were placed in a period of twelve months, seriously affecting the liquidity of the supply chain. Simon was aware of that problem.
“It’s interesting, if you look at regulated periods in any regulated industry, they have that same sort of curve. If you look at the utility sector, it’s no different. Whatever that funding period is, as you get to the end of it, things become less stable. I think each control period’s had that shape profile to it, as things get tighter near the end, there’s less stability, things get put off and then funding arrives and is given to another development.
“I’ve always taken the view that running any big project, and it’s no different in my future career, 90 per cent of the value is in the supply chain, it’s not in the client or the first tier organisation. So you have to do everything you can to work with those organisations to give them that long-term stability. Through my last five years in Network Rail, I put a lot of personal time into those relationships. I had to understand it all so that we could deliver, because it’s the only way you get efficiency in the supply chain. If you have a feast or famine type relationship, you’ll never get an effective delivery organisation.
“So I think some of the efficiencies that were achieved through those periods were because of that continuity. I’m not saying it was perfect, but we did put a lot of focus on it, we worked very heavily with organisations that you would see as strategic and I think, going forwards, HS2 will do the same as it develops its supply chain. Once you’ve got those – they’re long-term relationships; they’re not short term.”
The start of Simon’s career at Network Rail corresponded to the period during which Iain Coucher was chief executive – now thought of as being a time of centralised control imposed on a disorganised structure inherited from Railtrack. Simon doesn’t completely agree with that view.
“When you’ve got things that are fragmented and not under control, you naturally bring them under control. Then, to create more efficiency, you diversify them. It’s not a cyclic process, it’s a constant process of reviewing. So the perception is that, during those Network Rail years, things were very centrally managed. I’m not sure that’s true.
“It was about trying to create an empowered management team with local delivery. Even though it was a national organisation, most of the people were actually in regional offices at the time, or zones, then regions and whatever term was used after that – spatial areas of the country. So the bulk of the people were in Manchester, in Leeds, in Birmingham, in Glasgow, focused on local projects. Whilst the management may have been centralised, which I think did bring quite big efficiencies in terms of contracting, delivery was always local through that period.
“It was getting more consistent in terms of how things were delivered, standard designs, standard types of bridge design, standard parapets, standard signalling approaches, standard families of signalling systems linked to suppliers. But the actual physical delivery, working with customers, was very much a localised process. So, although the perception is that it was all centralised, in reality, certain things were centralised that were the right things to centralise, but delivery was very much a local aspect.”
When Iain Coucher left, to be replaced by Sir David Higgins, some of that perceived central control also seemed to be relaxed.
“That was very much around the time of the McNulty report, which was all about diversifying into local businesses alongside customers. We were looking
to separate the projects business as a standalone competitive business within Network Rail, to effectively demonstrate its efficiency through competition and create a national organisation with the local diversified regions as customers. There’s no right or wrong to many of these solutions. They’re all attempts to be more efficient and more effective.”
Highs and lows
During the ten years that Simon spent at Network Rail, there were some great moments, and some not so great. “I think if you look back at the whole period, the lowlight was certainly 2007, Christmas, the Rugby overruns,” he reflected. “We learnt a huge amount from that as an organisation. It was certainly the lowlight for me personally. Because reputation’s everything and it takes a long time to build a reputation.
“For the highlight, I think the delivery of what was achieved in CP4 by the whole team, the landmarks like Blackfriars Station, King’s Cross, Reading, and the real changes in customer experience. I was recently up in Edinburgh and went down the Airdrie-Bathgate line. When you see railways rejuvenating communities, it’s just great to see. It’s what infrastructure is there to do and what railways are there to do. So I think the highlight for me is just that, it’s seeing old things turned into fantastic new assets that will outlive us for a long time going forwards.”
A transformational programme
So with everything going well at Network Rail, and still much to do, why did Simon decide to move to HS2?
“We were at the end of CP4. CP5 would be more of the same, more opportunity to do big type projects. But, at the time, HS2 was the biggest transformational programme in Europe. It was the chance to transform the infrastructure of this country. It was the chance to do a hybrid bill and the front-end development of a project on a bigger scale, and the chance to grow a team, almost start a company from scratch.
“Over the last two and three-quarter years, we’ve taken an organisation of 300 people, 70 per cent of them agency staff, in an office that we were under notice to leave, to
an organisation of over 1,400 people, 70 per cent of them our own HS2 staff. We have people from all over the world, people from all sorts of backgrounds, many from all sorts of different types of rail, and also people from other industries as well.
“When you create a new team, you’ve got an opportunity to do things that are unique in a career. I’m very keen on equality and diversity in the workplace, so I had the chance to develop a more diverse organisation. Now, we’ve got 41 per cent women in the 1,400 workforce, which creates a very different environment to one I’ve worked with in the past.”
It was understandable, then, that the opportunities presented by HS2 made the decision to move fairly simple. But it wasn’t one without regrets.
“I’d like to have seen Thameslink to the end. London Bridge took some justifiable criticism a year or two ago, but I think the Thameslink upgrade will be transformational and London Bridge is going to be fantastic. When it’s all finished, it will be fantastic, an iconic piece of London infrastructure, just like King’s Cross or St Pancras, and I’d like to have seen that through. But there’s never a perfect time to move.”
Along with the engineering challenge at HS2, and the challenge of building his new team, Simon had to face criticism of everything from his salary to the choice of the route and the cost of the project from some elements of the press and the public, particularly those close to the proposed new railway.
“We have tried very hard to engage with communities on the route. I think the hybrid bill process makes that challenging because we are dealing with people through a litigation process. They are petitioning, which is absolutely the correct way of doing it, but at the same time we’re trying to create a long-term relationship with those communities. For about the last 12 months now we’ve put a lot of focus round communicating differently and better with the people. I think it’s our absolute focus to be as professional with those communities as we possibly can be. The way I’d liken it to the team is, we should be dealing with those communities in the same way that we would expect to be dealt with ourselves.
“Ultimately they live in places, they bought properties, and they didn’t ask for a railway to be built near their houses. I get that, it’s difficult for them. But you’ve got to look at it from a bigger perspective, from a national perspective. The country needs better infrastructure.
“One of the privileges I’ve had in the last three years, I’ve been around the world to look at most of the new high-speed rail networks and also some of the existing ones. This country is starting to lag behind. We have done a great job in getting more and more out of an existing rail network, but the reality is most of it is a Victorian rail network. It may have been operated on over the years, but that’s what it is.
“When you look across Europe, at the Far East, unless we have that quality of infrastructure, we’re not going to keep up with those economies. So I think you’ve got to balance the two. They’re very much about the absolute needs of local people versus the national need of having better infrastructure in the future.
“That doesn’t mean to say we shouldn’t deal with people as people and deal with them very professionally. There are times when we will never get complete agreement with people, but it’s all about being professional, listening, trying to understand people’s issues and, at times when we can’t agree or there’s a reason why we can’t do what someone wants, communicating with them and telling them why we can’t do it.”
Another area of criticism, not aimed at HS2 specifically but at the country as a whole, is the long-winded nature of the planning process. Other countries seem to handle the whole thing much more quickly.
Simon, based on his study of high-speed railways around the world, felt that the British system actually had its advantages.
“If you look at one extreme, into the Far East, into China, clearly the process is very basic. However, in the European model, there’s far more of a consultative engaging process.
“Looking at the French system, it does put more activity after the planning consents. So you can easily say yes, there’s less timescale, but actually if you look at the duration from Tours-Bordeaux getting its planning decree through to opening, it’s not a lot different to High Speed 2 Phase 1.
“We have had the fastest hybrid bill, or we will hopefully when it gets through the parliamentary process in a few weeks’ time, half the time of Crossrail. We’ve had three times the petitions of Crossrail and we actually see the process working, it is democracy in action. We’ve made over 400 changes to our design as a result of those petitions and those committee meetings. So, whilst it’s very easy to say it takes a long time, the bill was only submitted in October 2013 – in three and a bit years it will have been through the whole process, through both Houses and quite a lot of changes as a result of that.
“I think one of the issues we have with the UK model is that it does put a lot of the engineering in before the hybrid bill is submitted, which means less latitude after the commitment through the House. I could argue it creates less opportunity to create client change, which is a bad thing in terms of changing the plan and changing the programme. But the hybrid bill process will deliver a parliamentary design that will stand the test of time, and you could argue that’s far more effective than one that’s agreed to at a higher level and everything then changes after that.”
And what of the ‘spiralling cost’ of HS2?
“It’s interesting. All of the changes we’ve made are within the budget contingency we set for Parliament change. So we are within that budget envelope, and I mean within it, I don’t mean at it. We’ve done all those changes in the design within the constraints we set going back to the time I started, before the Commons committee started. The cost of Phase 1 (£21.4 billion) is the same now as the day we came in.”
In fact, the numbers have changed, but only due to accounting practices. Initial goals were set in 2011 pounds, current costs and estimates are in 2015 pounds, so there has been some numerical increase. And the costs of phase 2A (to Crewe) and phase 2B (to Leeds and Manchester) and the rolling stock (two fleets of trains, one dedicated to HS2 and one capable of running on the classic network) have all been added in, making the current total £55.7 billion. But that’s for the whole HS2 network.
“Let’s just reflect on that,” Simon interjected. “Phase 1 – we are on programme. We are looking like first week in February, last week in January for the royal assent, so providing we get that we will maintain the programme and the programme’s got a very high degree of probability.
“We’ve ordered £900 million worth of the early works, they’re mobilising now. We’ve now got a significant period of procurement assessment on the main work civils and they’re looking to be awarded May/June next year to start actual construction about a year from there, so the middle of 2018. I’m really pleased at the people who have shown an interest and bid for those contracts – we set a strategy to make sure we bring in expertise that have built high-speed railways before, alongside and in partnership with UK-based business, creating UK-based jobs.
“So Phase 1 is in good shape. There is still lots to be done, clearly, but what is probably less well known is that next year we do all the market engagement and will release the strategies and PVQs for stations, systems and rolling stock. So whilst we’re thinking about civil engineering in the business, we’re spending probably more time talking around stations and systems now.”
With the hybrid bill for Phase 1 so close, the design is now fairly well advanced. One much-publicised debate has concerned plans for the London terminus at Euston, and what that will mean for residents in Camden. Various plans have been proposed, all with advantages and drawbacks. Is that design now finalised?
“The answer to that is, it’s fixed for the hybrid Bill. The hybrid bill effectively creates a spatial envelope, limits of deviation, environmental impact elements which link to things like spoil removal, all of that is fixed, or very clear within the bill where we’ve got to do more work – for example spoil removal is one where we’ve got to do more work, to try and get more out by rail. But all of those confines are fixed.
“The actual detailed design of what Euston looks like will be the detailed delivery strategy which will include, in the case of Euston, a development partner for the over-site. So we’ll have a team looking at the whole master plan, including Network Rail’s footprint, because clearly, whilst there is only funding for one element, a developer needs to take a long-term view of what the whole station will look like.
“Euston has to be seen as one station and it has to have an outstanding experience for High Speed Two but it needs to complement and fit into whatever Euston looks like overall. So the design has always taken a holistic view, even if it’s delivered in phases. Indeed, it may be a decade or even two decades before the Network Rail element is redeveloped. The point is it will look like one and feel like one facility, with integration of services and station staff over time.
“Customers frankly don’t care whether a particular train is an HS2 train or a Network Rail train. They just want to get the train to their destination, at the best price.
“The current assumption is that HS2 will not be a premium price operation but that we’ll have the same broad cost that we have today. Now, I think there’s some big opportunities here. If you look at how you can control and manage demand, you can create a better customer experience.
“When you get out of bed in the morning and decide you want to go to Glasgow, your connection to Euston, your connection to Birmingham, your car park in Crewe, that should all be done through one seamless experience, not five different advanced tickets. Everyone should have a seat. If you want to change trains you can change trains and you’re just allocated another seat through the system. I’ve seen it work in Japan. It works superbly well. There’s no reason why it can’t work here.”
So, with all that to come, Simon was approached last July to join Rolls-Royce.
“It was a really tough decision, actually. It’s a big personal opportunity. Part of me will always want to have stayed to finish HS2 but you only get one go at life and these things come around when they come around.
“As I leave it, my hope for the railway industry is that it grabs the opportunity HS2 presents. Industry thinking can be quite short term, and HS2 is a huge long-term opportunity, so we need to grab it. I don’t just mean by operating it, I mean by building it. I mean everything from how it configures the supply chain to skills – 2000+ apprentices through colleges – all the way through to a great customer experience. If we don’t, then we’ll always be more expensive than international competition and will always be rightfully criticised for not grasping opportunities.
“It is a huge opportunity, it really is. I look forward to riding on it one day.”
Written by Nigel Wordsworth