Terence Watson
one and a quarter hours to do a short commute, so there will be pressure to intensify that. And I see more alliances and joint- venture ways of working in order to share the risk. I see very large organisations using all their balance sheets to bring the answers. Apart from HS2 I don’t see any other lines in construction but I do see that we’ll be at the peak of electrification, so the railway will be cleaner and the industry will be more sophisticated about how it measures and manages energy, which Alstom wants to be involved in.
‘I think the Toc and franchise principles will stay although they
will be fine-tuned. Trains will have ERTMS on board which will mean reflecting on how we operate the railway, because safety rules based on 1995 models will become obsolete. ‘Statistics from the Long Term Passenger Rolling Stock for the Rail
Industry report (February 2013) show large future procurement. We trust those figures and are going to think about them in our strategic planning. In fact, the report’s statistics are quite revealing because they show there will be a far larger fleet in operation. Then we believe conditions are appropriate to re-industrialisation in the UK. Whether around integrated train sites or assembly, I don’t know, whether specialised components like bogeys and traction, I don’t know. Whether technology around traction and control systems and communications systems – more likely. So what you get is a supply chain that’s re-energised and then you get exports.’
More involvement in alliancing
The industry is going through change according to Watson. ‘The status quo is definitely not there anymore; the direction is now towards cleverer solutions that join up the railway as a system. There’s no doubt that we have managed to join back the bits and pieces of the legacy which was the whole British railway, however we’re finding gaps every day, and having to either back-fill them or re-consider our reaction to them by taking positions concerning the interfaces. The railway has to come back to a holistic view of the system and I think we all know that. What isn’t in place yet is some sort of enabling mechanism to make that efficient, but we’re getting there.’ Referring to Network Rail’s Alliances with operators, Watson
mentioned this as something that Alstom would like get more involved in. ‘For example Pendolino’s have the ability to measure track and catenary but we give that information to Network Rail. Wouldn’t it be great if Alstom was able to maintain or even replace that tracking and catenary on the basis of the information it gets, and therefore look after the interest of both the operator and Network Rail. That’s a good alliance. You’ve got the full and powered engagement of a company like ours working on a very discreet basis, and we could be paid on a maximising of performance basis for the whole railway. It’s how we’d like to see the market go.’
The market by 2026 What Watson would like to see in the future includes the government engaging in the way it does in the power sector, in piloting and developing technology, and the railway benchmarking itself against industries such as aircraft and automotive. Taking the proposed start date of HS2, I asked Watson to gaze into a crystal ball at what he actually does see for the industry by then. ‘Economically, and assuming we’re out of the worst of the period of recovery, I think ridership, although it will level off more, will have continued to rise. More intensity of demand will put pressure on all aspects of the system – signalling, controls, the 24/7 railway. Trains will generally be faster – people are really fed up with slow timetables and trains doing 30 miles an hour and taking
Mentoring SME’s in rail A recent feature in Rail Professional by Achilles discussed what a hard time SME’s are having in placing their innovative rail products and services in the hands of buyers. It’s an issue that Watson mentioned without prompting. ‘There are SME’s in Britain that can’t export and don’t have a great chance of doing so, and yet we have massive international companies here that are probably not doing their bit to get those SME’s working outside of Britain. Some of them aren’t ready for it – I seem to recall a statistic of 1,500 companies with below 50 employees trying to sell to the railway. So it’s a very hard thing to say that Alstom would want to use them to supply its supply chain for China for example, you couldn’t do it. But what’s probably fair is that we come up with some sort of ideas for mentoring like other countries. We can give these companies a little bit of non-executive help and TLC in even telling them where the markets are and providing direction to help them develop. I think that approach is missing in the UK and it’s a terrible pity.’
A virtuous circle All in all then, Watson is very positive about the company’s position and activity in the market at the moment. ‘The contracts we have and joint ventures with our consortiums for infrastructure business are brilliant and definitely proved to be the right way to go because Network Rail is definitely looking for cleverer solutions and bigger boys to play in the market. ‘We re-shaped earlier than our competitors regarding old
industrial manufacturing and that broke a very difficult cycle and turned it into a virtuous circle. One of the nice things we’ve done recently is taken back the class 180 fleet which is split around three operators and come up with a sophisticated solution for ‘virtually’ managing the technical services around the maintenance contract, which I don’t think has been done before. We’ve just completed a massive overhaul in Manchester of the Pendolino fleet. Trains on the WCML have got longer because we’ve brought in new intermediate cars and we’re fitting them in Britain in our depots. And we’ve got a €1 million contract for a trial of inverting substation technology with London Underground – the first one ever –and we will industrialise those pieces of equipment in Britain in the long-term.’ Speaking about virtuous circles reminded me of my time as an
editor at French business school, INSEAD, which was incredibly fond of the term. Watson did an executive MBA there and we reminisced about Fontainebleau and then talked about Prince Charles’s event again. ‘He likes to be stroked,’ he said, and I felt that’s something Watson is very good at.
July/August 2013 Page 57
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