Terence Watson
selective. ‘So to answer your question backwards, Alstom’s product range is now suited to the UK, we’ve got some new products coming and very good existing products. But what we wouldn’t want to do – and I don’t think the world is like this anymore – is spread ourselves across the market and claim to do everything – no big manufacturer can do that.’ Indeed, Watson thinks it’s a ‘real mistake that the rail industry makes – that you get all of the competitors bidding for everything all of the time. We’re just not interested in that. We’re also very selective in strange new places you would never dream of, so now, if we win one in four contracts in the UK and not two out of four, we’re winning one in Russia, which just wasn’t a market five to ten years ago.
‘So we’re back in the market but will only bid where we think
we have a real advantage, either strategically or technologically. That confuses some people – politicians especially. They still ask the question: ‘Are you here?’And in line with our approach we decided we wouldn’t bid for Crossrail rolling stock. Instead we bid for the infrastructure, and with our partners we’ve won the largest single contract that Crossrail has placed. It’s puzzling for government and some of our clients but we don’t think we could have won the rolling stock contract in the prevailing conditions.’
Great new rolling stock - but what about the infrastructure? Rolling stock for HS2 though, is surely something the newly selective Alstom is interested in? ‘Yes absolutely…’ And again, Watson wanted to give a contextual answer. ‘I do plead with you to take just one reflection about rolling stock and that is if you don’t get infrastructure right you can forget new rolling stock and new types of rolling stock. Only half of the UK is electrified and the capacity on a lot of electrified lines is reaching its peaks. So where does the industry go? It needs some sort of new levers and drivers for growth. Electrification is one. Power supply is another, for example north of the river Thames is 25,000 volts overhead line or diesel, south is a very limited 750 volt floor collector. A power upgrade allows you to put more trains on the line but then you need a signalling upgrade to allow more trains to travel closely and efficiently together. Then you have to open out the station to get more tracks in, then you need new trains. ‘This fits in with our strategy which is: let’s get the
infrastructure right and then look for the appropriate types of trains. Will they be faster? We think so. Will they be longer and more intensively serviced? Yes. Should they be more energy efficient, right sized and appropriate for the future? Absolutely. Not many people are taking leadership in that area and we’d like to be involved in that.’
Procure in the right way
But the most important point for Watson is procurement, ‘Because if the government or train operators procure in the right way, you get the greatest attraction of the largest number of manufacturers and you get clever new trains. Procure in the wrong way and you end up with same old same old, and half the world doesn’t bother bidding.’ Asked if he feels this is in danger of happening, Watson is
July/August 2013 Page 55
emphatic. ‘Yes. I’ve spelt this out on a few occasions but if it’s not common knowledge it’s common sense. For example, if you would like an ultra-light train, that should come out in the evaluation of the bid. If you want a train that is low-cost to maintain but maybe dearer as a capital cost, again it should come out in the evaluation. That’s really important – if energy efficiency is one of the primary requirements, it should come out in the bid. Very often it doesn’t happen that way. What tends to be looked at is a reasonably unsophisticated format which ends up with manufacturers realising that the product they’ve got, if it was adapted, is probably the best one to bid on. And by the way, if you weren’t already supplying one in the UK then you’re outside this strange casino and you can’t get in because your capital costs to start up and supply your first train would put you out of the competitive market. And that’s what we see - quite a lot of ‘flip flop’ between the big makers, that somebody wins one big contract and dominates the horizon for that type of train for a while, until there’s a tipping point and a new technology or type of train is needed. Then it flips to somebody else and the others are disadvantaged at that point. So you have four or five manufacturers with some sort of interest and equity, but probably only enough procurement in the UK for two or three of them at any one point in time, and that disturbs the industrial footprint, the manufacturing footprint, and supply chain. Because they can’t maintain factories that just don’t recover.’
Working like hell on HS2 Moving back to HS2, Watson feels it’s important to ‘bring in the best’ of Europe and match it to what’s needed in the UK. ‘Maximise, maximise, maximise for goodness sake. Let’s make sure we get the latest technologies because the HS2 trains are going to be procured years away from now. I was at an industry event recently and somebody made a comment that was plain silly - they said: ‘What we want is proven and tested product available now’. And I had to react. I said, ‘In the period from 1962 to 1966, that would have meant offering steam trains as opposed to diesel. And in 1972 to 1976 diesel trains instead of electric trains.’ It was such a stupid comment you could even cry that I heard it said by a rail professional. ‘If you look at the evolution of high speed, you absolutely
wouldn’t want an ICE 1 or a first or second generation TGV or a second or third generation Pendolino. You’d want the latest wouldn’t you? So we think HS2 is an opportunity we’re going to chase and we’re working like hell on it. We’ve supplied quite a lot of supporting material to HS2 Ltd and we’re involved in that dialogue.’ In fact Alstom’s AGV is the train that HS2 Ltd is using to model with at the moment. Asked if he hopes that’s a good sign, Watson is ebullient. ‘Hah…well at one level it’s meaningless, but at another level it shows that we’re…first of all we offered it as a free service if you like and they chose us. But it means something about the product because they probably see it as one of the latest generations of trains, and we think it’s the best. If you take energy or weight for example, the energy consumption of an AGV is probably not much more than a Pendolino but it’s running at a far higher speed. The other reference we use is weight: if you take an AGV full of
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