Rail 451: After the honeymoon, Bowker must make the marriage work

The Strategic Rail Authority chairman has had an impressive first year, but as the time comes for decisions rather than rhetoric, will his sure touch desert him, asks CHRISTIAN WOLMAR, who also makes his traditional predictions for the year ahead.

Richard Bowker has been rather fortunate in having had his whole first year as a honeymoon period in his £250,000 job as chief executive and chairman of the Strategic Rail Authority. There are few certainties in the rail industry (though see Mystic Wolmar below) but one thing is absolutely certain: his second year is going to be a damn sight tougher.

Moreover, this will be made worse by the fact that the sure touch of his early days is becoming a trifle more hesitant as the time for making decisions, rather than cheerleading speeches, is fast arriving.

There is no doubt that his performance during his first year has been impressive. A solid top team has been appointed, documents have flowed thick and fast from the grey tower at 55 Victoria Street and a whole host of sensible initiatives have emerged. Shame about the SRA’s first three years, but that’s history.

In addition, his agenda for the next year would be enough to send lesser men off on permanent sickies: sorting out the refranchising of around half the network; getting Network Rail to bring down costs; helping set up the first Special Purpose Vehicles for enhancements; encouraging the improvement of performance; fixing the Southern power supply problems; deciding whether to allow Virgin CrossCountry extra cash to sort out its overcrowding; and countless more smaller decisions.

In sum, just like his ultimate boss Tony Blair, Bowker has reached the delivery stage of his role and inevitably he is beginning to make mistakes.

Several of these have stemmed from the appointment of Ceri Evans as his press chief. Now I have nothing against Mr Evans personally but he is a veteran of political campaigns with both Steve Norris, the Tory London mayoral candidate, and the infamous Millbank Labour Party HQ and is, therefore, an incorrigible spinner. Just like the scorpion in the fable, he can’t help it. He likes, for example, to see the SRA featured prominently in the Financial Times , so that is his first port of call whenever he wants to see his boss’s views in the press.

When I was on The Independent, I had a naïve belief that public bodies should not do this. They should release their stories to all newspapers simultaneously, without favour. Now that may sound old-fashioned but Evans should realise that working for the SRA is different from political campaigning where there are no holds barred.

Moreover, the problem with spin is that the emphasis is not so much on what story is being told, but on the way it is related and reported. Therefore Bowker’s rather bland speech about wanting to see the railway being professional – I’m still unsure exactly what that meant – emerged in the FT as a lecture to the train operating companies to pull their socks up, a conclusion that could not possibly have been drawn without a bit of prompting from Evans the spin.

Another example is the way that Bowker’s next speech, to the Rail Passengers’ Council, ended up on the front page of the London Evening Standard as a 64-point headline screaming that the railways were broke. Bowker’s speech, in fact, merely said that costs escalation meant that more money was needed to buy the same amount. In an interview that day in the Financial Times , he also said that some major projects might be in doubt if costs could not be controlled. But somehow that got translated into big headlines and lots of continued media interest over a story which, in fact, contained very little that was new. Now this may have been a clever ploy to warn the contractors that the pot of gold was limited, but it had the effect of undermining confidence in the railway. And that, surely, is the last thing that Bowker wants, given the need for bucketloads of private cash for investment in the railways by the private sector.

Nor was it very clever to make a throwaway remark in that same FT interview to the effect that the £3.4bn ring-fenced for freight in the Strategic Plan could no longer be guaranteed. This remark, which cannot be blamed on Evans, so incensed the Rail Freight Group that its chairman, Tony Berkeley, issued a wonderfully intemperate press release headed ‘Bowker stabs freight in the back’. Berkeley points out that the £3.4bn is one tenth the amount allocated to passenger services and that the SRA has a duty to promote freight as well as passenger traffic.

Berkeley accepts that Bowker has mentioned the costs issue in several speeches but argues that he has failed to address it: “There’s lots of things that need to be done such as challenging ridiculous safety requirements, looking again at Railway Group standards of which there are 10,000 and reducing the bureaucracy on vehicle acceptance. But that kind of detailed work is not being done.”

The other area where Bowker has made a fundamental mistake is in the handing out of large amounts of money to existing franchisees to bail them out. He even went further, as he admitted to the Select Committee on Transport in November, with the bailout of the Virgin franchises with an interim £106m interim payment last summer which was deliberately timed to prop up Stagecoach’s share price. This is entering the murkiest of waters indeed. Should state organisations – particularly one with a reputation for being more concerned with commercial confidentiality than public access to information – be playing God in the Stock Market? The message sent out in all this to the operators is that they will always be rescued by the SRA, which effectively leaves Bowker with very little room to squeeze the best deal out of them.

Perhaps Bowker had realised this when, in another FT story on December 7, it was reported that bidders would have to look at cuts of 20% in their budgets. Yet, a couple of days previously at the Rail Passengers’ Council meeting, Bowker had been saying that more was being expected of the franchise bidders who will be subject to tighter requirements (Key Performance Indicators) on factors like cleanliness and reliability. The message, therefore, was confused by yet more spinning.

It was watching Bowker respond to questions at that RPC meeting which made me realise just how much strain he is under and that he is a chap with quite a lot to learn in dealing with the hoi polloi. He was unnecessarily curt in putting down some questioners who, while admittedly arguing only for their narrow local interest, deserved at least the courtesy of a polite response. Performances like that will not earn him the respect which he needs to be able to carry out his incredibly onerous job.

And that is another point. Being both chief executive and chairman suggests an inability to delegate. It is time that, as is recommended for private companies, the two roles should be separated and Bowker relinquishes one of them, presumably the latter.

Moreover, in every speech, Bowker mentions that he does not want a debate about privatisation or nationalisation, but then goes on to argue that the railways have not been renationalised. That is not a view widely shared either within the industry or in the City generally. The industry is now controlled by a Government agency, funded largely by the state and the risk is almost exclusively with the taxpayer. As the old joke about a duck goes, it certainly looks like one and sounds like one – ironically it is when Bowker is in full flow about what he intends to do that one becomes aware of just how little of the original privatised concept survives.

This refusal to recognise the reality of the situation, presumably out of fear of frightening the horses both in Whitehall and in the City, makes Bowker look like an emperor without clothes. A railway industry insider said that apart from his three senior executives, no-one in the SRA appears to dare to challenge Bowker. As the RFG’s Lord Berkeley recalled: “Earlier this year, Bowker is reported to have told his staff to ‘fit in or f*** off ’.” Now that really is the old-style command and control so familiar to those who worked for British Rail.

There is no doubt that Bowker has an almost impossible job and is worth every penny of his salary. As I stressed at the beginning, he has made enormous strides and he deserves support but he must also learn from his mistakes, something which his predecessor failed notably to do. This coming year will be the really testing one. If he can’t show any progress by the end of it – by, for example, reducing costs and letting some franchises on good deals – he will have failed. And that will be bad news for the industry.

So, Richard, your New Year resolutions must be to smile and relax more except at the bidders, be ready to accept that things which quack and waddle are probably ducks, and try to ensure that your dealings are as open as possible and get your man Evans to bowl straight. And good luck for 2003.

The time for getting out the crystal ball and for assessing last year’s performance has come round all too quickly. Mystic has reason to feel marginally pleased with last year’s predictions, which were:

  1. Railtrack will still be in administration on October 7 2002, a year after the initial move by the Government.
  2. Stephen Byers will still be Secretary of State for Transport, etc.
  3. There will be renewed concern about safety on the railway after a fatal accident, probably caused by vandalism.
  4. At least one train operator will have thrown the towel in.

Well, Mystic feels a bit cheated as on the first one he failed by just a couple of days, as the Government rushed through the Network Rail rescue to beat the anniversary. But it’s either a goal or not a goal, and this case I feel like I’ve lost on penalties…

On the second, who could have predicted Byers’s Kamikaze attitude and inability to keep his mouth shut? Even the ‘etc’ is wrong since Mystic failed to predict the break-up of DTLR.

Potters Bar certainly counts towards the third. The vandalism point is still, of course, under investigation following the sabotage allegations, though personally I think it is wrong. But it’s worth a point.

And there is no shortage of operators which effectively threw in the towel – West Coast, CrossCountry, ScotRail, Central, Anglia – by saying they needed more money or else.

So the total is two out of four.

Will Mystic do better this year?

  1. Richard Bowker, Tom Winsor and Alistair Darling will still be in their posts by the end of 2003.
  2. The opening of Channel Tunnel Rail Link Section One will (just) miss its target date of September 2003 and will be in 2004.
  3. The SRA will face a financial crisis over refranchising which will proceed more slowly than expected.
  4. At least one entirely new operator will be given a franchise.
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