Rail Professional interview II: JEREMY LONG MTR is well-placed to thrive in
the post-McNulty world of alliances and partnerships
J
eremy Long, CEO of MTR’s European Business, is as busy as he’s ever been with the company. Franchise bids for Essex Thameside and Thameslink – notwithstanding
the pause in the aftermath of the West Coast debacle – would have kept him busy enough. But Long also oversees the running of MTR’s London Overground joint venture with Deutsche Bahn, and MTR’s Metro concession in Stockholm. Not content with this, Long is also seeking further expansion: ‘We are now looking at other franchise and concession opportunities here in the UK and elsewhere in Europe.’ A new impetus for growth has also
been provided from the MTR group board in Hong Kong. ‘This means we can now look at potential investment- led opportunities, if we see the chance to make a sensible commercial return through investing in railway assets - whether that is infrastructure, rolling stock or other businesses,’ Long explains.
The challenge Having these kinds of opportunities to pursue is why Long initially chose to leave FirstGroup and join MTR. ‘The opportunity to build a business over here – backed by a very credible international operator that, in some respects is clearly outperforming the UK market – was a very interesting challenge,’ he says. Long admits that he initially didn’t
know much about MTR. ‘The more research I did, the more impressed I became about the quality of operation and the culture within the business.’ The fact that he’s still with the business nearly eight years later suggests he remains impressed.
Size is a major strength MTR’s business is broad and growing. It is
a large company by any standards, with a Hong Kong Stock Exchange listing and a market capitalisation of around £11bn. As well as its home base in the former
UK territory, where the railways were built by British engineers, MTR now has operations in major Chinese cities such as Beijing, Shenzen and Hagzhou, Melbourne in Australia, as well as Stockholm and London Overground on Long’s patch. It also has an international rail
consulting business which, for example, recently completed a project supporting the introduction of new Chinese rolling stock on the Rio de Janeiro metro. And the corporation covers every aspect of the rail business, from train operation, to track maintenance, renewals and enhancements, and maintenance of rolling stock. Long sees this as a major strength. ‘It means whatever the problem, we have a specialist team somewhere within MTR who can fix it.’
The post-McNulty world
It also means that Long thinks MTR is well-placed to thrive in the post-McNulty world of alliances and partnerships. ‘In Hong Kong, MTR benefits from
operating a completely integrated railway. It is able to look across the track, signalling infrastructure, rolling stock and operating aspects of the business and take decisions as to where to optimise its investment and where to focus in terms of achieving improved performance,’ says Long. ‘That is a benefit in terms of being able
to see it as a holistic system and look at investments in whole-industry, whole- life terms.’ In the UK and Europe as a whole, vertical integration is firmly off the agenda, but Long is confident that alliances and partnerships can deliver similar benefits, with the right operators and infrastructure managers in place. ‘McNulty highlighted areas where
neither side was going to have been able to achieve the same level of cost savings or efficiency working on a standalone basis,’ explains Long. ‘Above all, McNulty was encouraging the industry to find new ways of aligning, alliancing or incentivising the various parts of the industry to work more effectively together to bring about further cost savings. I completely agree with that, both in terms of improved operating performance and cost efficiency. There is more to be achieved through the industry aligning itself more successfully.’
Close relationship with Network Rail Long sees this alignment as key to what MTR offers, and has been putting these principles into practice via LOROL, MTR’s joint venture with Deutsche Bahn, which holds TfL’s London Overground concession. ‘We would simply not have been
able to drive up LOROL’s overall PPM performance to where it is today without a long-standing and very close de-facto alliance with Network Rail.’ And Long praises Network Rail’s
approach under David Higgins, saying ‘Network Rail has been an improving organisation over a long period of time now and the culture and approach of the current top management team are very much welcomed.’ ‘We have worked with Network Rail over a succession of performance improvement initiatives and we work very closely with them day in and day out to sustain the level of performance that we see from LOROL right now.’
Olympic performance
That level of performance is consistently up there with the best in the country, and during the Olympics London Overground achieved PPM of more than 98 per cent, despite carrying more passengers on more
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