Comment
the company faces coming up with convincing-looking results under considerable time pressure. It is unlikely to be long before the coalition government starts interfering more deeply in the company, an event that could bring the odd public-private hybrid wholly under government control. The task is all the more urgent, because the company needs to curb the growth in its debt to ensure it is not spending an unsustainable proportion of its income on interest payments within a few years. Observers’ views of Iain Coucher’s time at Network Rail have, nevertheless, grown distorted as it has become fashionable to deride nearly every aspect of the company’s performance. The detractors forget that, when Network Rail took over the network, only 78.6 per cent of trains were arriving on time, on average, each year and that the fi gure has now improved to 91.5 per cent. Critics point out that Network Rail missed a target to reduce its unit costs by 31 per cent between 2004 and 2009. However, the 28 per cent achieved was a creditable start towards bringing the industry’s costs under control. Pay levels at the company have also grabbed a disproportionate
level of the attention devoted to its affairs. Even if the company and directors have handled the issue with a startling lack of aplomb, it is worthwhile remembering how much more acceptable high pay and bonuses were before 2008’s banking crisis, when the current Network Rail contracts were written. It seems fair to endorse the judgement of Rick Haythornthwaite,
who took over as Network Rail’s chairman in July 2009. The tightly controlled management style associated with Coucher was right for Network Rail’s early days, when the rail network was in crisis and huge changes had to be pushed through a demoralised organisation. The company should undoubtedly have moved on more quickly to a collegiate style, where more junior managers would have had more infl uence and corporate culture would have been more like that at a normal, large listed company. The challenge may be fi nding managers willing to introduce
such a culture at Network Rail. The company has endured so many political attacks and the executives have become such personal targets for vilifi cation that Haythornthwaite may struggle to fi nd suitable candidates willing to do the work for the substantially reduced rewards likely to be on offer. Railway industry gossips perpetually discuss the possibility that
the company could be nationalised and turned into a government agency, much the same as the Highways Agency. It would then, so the argument goes, need no more than a civil servant, on a civil-servant type salary, as its chief executive. The idea betrays the depressing lack of vision among many railway industry watchers, who see the main challenge as cutting Network Rail’s chief executive down to size. The tasks involved are clearly far more complex and demanding than running the English trunk road network and it would be a tragedy if the organisation’s future was decided by the political need to reduce the chief executive’s pay. There can be little doubt that Network Rail’s new chief
will need to change a great deal. The company in recent years refl ected elements of Coucher’s strengths – including his stubborn determination to get things done– along with his slight prickliness. A more open, relaxed style towards politicians, suppliers, employees and customers will do the company great favours even before anything else changes. A new chief executive will also have to take an entirely fresh look at the company’s costs and seek to cut them sharply. Coucher,
‘Railway industry gossips perpetually discuss the possibility that the company could be nationalised and turned into a government agency’
by many accounts, did well at pressing his suppliers to cut their costs, but many onlookers think there are layers of bureaucracy and waste within the company itself that need to go. Even if a new chief executive manages to make a major
difference, he or she could still fi nd the company nationalised or otherwise stripped of its independence. The coalition government seems to feel a powerful urge to dismantle bodies as closely associated with the Labour government as Network Rail. But, whatever Network Rail’s faults, no-one should imagine that
a government agency unsure of its year-to-year funding and at the mercy of politicians’ whims would do a better job of running the railway. The Iain Coucher era could soon be looking like a golden age.
ROBERT WRIGHT IS THE TRANSPORT CORRESPONDENT FOR THE FINANCIAL TIMES. HE IS ALSO THE SEAHORSE NEWS JOURNALIST OF THE YEAR 2009:
robert.wright@ft.com
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SEPTEMBER 2010 PAGE 15
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