Investing in the future

Metronet Rail works in public private partnership with London Underground to maintain and upgrade two-thirds of the Tube: the Bakerloo, Central, Victoria, Circle, Metropolitan, District, Hammersmith & City, Waterloo & City and East London lines. It’s 30-year contract began in April 2003. Chief Executive Andrew Lezala, who joined in 2005, answers Christian Shelton’s questions.

Andrew, you have been the CEO of Metronet for one year now. Can you please give us some background about yourself, what you did before joining Metronet and how your past experience has qualified you for the role?

I’m a Chartered Engineer and spent all my professional life working in businesses related to the rail industry, in both the public and private sectors. I’ve been President of the Services Division at Bombardier Transportation, President of DaimlerChrysler’s Rail Systems Metro Business worldwide and Managing Director of DaimlerChrysler’s Rail Systems operations in Australia and New Zealand. Before joining Metronet in 2005, I spent a little over a year at Jarvis plc, where I was Chief Operating Officer working on their turn-around programme. I’m also a Fellow of the Institution of Mechanical Engineers.

Business wise, what was the situation at Metronet in when you took over as CEO?

Metronet had made good progress on getting to grips with its two-thirds share of the maintenance and renewal of the Tube, since its public-private partnership contract with London Underground began in April 2003. There was, however, a need to accelerate the progress with the renewal programme, in particular stations, and to improve day-to-day performance. Also, I saw one of the principle needs was to make more sense of the enterprise, working together in a co-ordinated way as a whole to ensure we delivered on our commitments to LU.

Have you made any changes to the way Metronet operates as a company?

Yes. One of the first things I looked at was to foster a more integrated approach to the business as a whole; to have a single management team and to reorganise the business in such a way that its constituent parts were joined at the brain rather than at the hip.

As part of the reorganisation I formulated an asset management business area which – after all in a business like ours – is the brain of the operation, determining what we do precisely in the form of asset renewal and when we do it.

Part of the process was to reduce the number of layers of management from 13 to a maximum of six.

What have been your main achievements over the last year?

The work of that reorganisation was completed in a short period of time and I introduced the Balanced Scorecard system which I believe is the best way for a business such as ours to monitor its performance and to continually improve. Traditionally, businesses measure themselves solely by financial results which is information already some days or months old. This has been compared to driving a car with the windscreen blacked out and using the rear mirror to steer. The Balanced Scorecard addresses this, measuring the whole business to create goals for everyone in the company to drive towards. The system is aimed at showing how, by working together, we in Metronet can achieve our goals and deliver the real improvements for the London Tube that everyone wants.

We also revisited our values for the business and determined in the light of our strategic direction what those ought to be and what behaviours were necessary by all of us in order to fulfil those values because I do believe that we will make London Underground the best metro in the world.

There are so many areas for which Metronet is responsible. How did you prioritise these?

There are a number of things which needed to be implemented at the same time. I know from my experience working with other similar organisations that the challenges faced by Metronet can be overcome and the Balanced Scorecard is one of the key drivers to ensure we can in fact deliver on those.

You have a 30-year contract with London Underground. With a contract this long, how far into the future are you planning and how flexible are you in adopting new technologies that will inevitably emerge?

Our contract with London Underground is divided into four periods, each of 7.5 years. Our first is fully planned, as are significant parts of the second contract period. Are we flexible in adopting new technologies? We have to be! I’ve put in place a programme named ‘Innov8’ to reward our staff for suggesting ideas that save us money and enable us to do the job better. Innov8 has already generated some 700 ideas – one of these has cut the time it takes us to refurbish escalators from 24 to 16 weeks – a saving of around £500,000 for each escalator and a significant benefit to LU and passengers. LU rightly expects us to be innovative thinkers and to use new technologies in the execution of our work.

So, what are your investment plans?

One of our key objectives is to improve capability – the ability to transport more people faster from A to B – which will be delivered chiefly through line upgrades. Metronet has chosen to do this through the provision of new trains and the first of these will start to appear on the Victoria and Metropolitan lines in 2009 with that programme continuing through until 2015.

As part of that key deliverable we signed a contract in April 2003 with Bombardier totalling some £3.4bn for the provision of 190 new trains for the sub-surface lines of the Metropolitan, Circle, Hammersmith & City and District lines and a new fleet of 47 trains for the Victoria line. All this will run on new signalling systems provided by Bombardier that allow trains to run faster and closer together, increasing the capability of these lines to move people around London.

Aside from the Victoria line upgrade, we have refurbished 20 trains on the District line which, at £1 million apiece, offer better security through CCTV in every carriage, improved access for the disabled and parents with pushchairs and a smart, modern environment. We’re on target to refurbish all 75 trains nine months ahead of schedule.

We will also renew large swathes of track and modernise or refurbish all 150 stations on our network, introducing new levels of ambience, passenger information and security through near-blanket coverage of public areas with digitally recorded high-quality CCTV. The public is starting to experience the benefits of our renewals and this will escalate significantly over the next few years.

To give you an idea of the scale of this programme, we are spending £2.5 million every working day until the end of 2010 and currently managing some 500 projects.

You mentioned track renewals. Tell us more.

We have already renewed some 40km of track and by the end of 2010 will have renewed another 165km. This gives passengers a smoother, more reliable ride. In the open sections (there’s actually more of the Underground above surface than below!) we renew track by closing sections at a time over weekends. In October I signed an £80 million 10-year contract with GB Railfreight who will supply us with a new engineering fleet to triple the number of weekend work sites on half our network. We’re using mainline engineering trains of almost half a kilometre in length with high-output track laying vehicles, pulled by diesel locomotives. This will double the length of track we lay in a 52-hour possession from less than 500m to 1km. It’s a much tougher job in the deep Tube because sleepers are set in concrete and take considerable effort to replace in this cramped environment. Nevertheless, our track team has devised new techniques which has increased the rate of sleeper renewals from 10 a night to 18. That’s an enormous achievement.

You have been criticised for your lack of performance in station modernisation. How do you plan to improve your track record in this area?

We have publicly acknowledged that our stations programme is late and we have a recovery programme to recover the backlog within two years. During the past six months we have streamlined our delivery organisation which now falls within my direct control. In doing this we have aligned the two organisations much closer and brought more than 100 of the key delivery people into our headquarters.

What happens if you don’t meet your ‘Key Performance Indices’ with London Underground?

This relates to our maintenance work and the day-to day performance of our share of the network. Metronet receives a payment every four weeks for its work. A percentage of this is adjusted depending on how Metronet performs against a series of benchmarks in the areas of capability (our ability to move people around the network), ambience (the quality of the travelling environment) and availability (how many assets are in or out of action – for example, the number of trains or escalators in service). As an additional incentive for us to perform, the deductions suffered for poor performance are generally twice the rate of the increase in revenue for improved performance. In short – it’s in our interest to perform; engineering overruns and out-of-service assets cost us money.

When do you think passengers will start to notice your work?

I believe they already have. Overall, passenger delays are one-third less under Metronet and our track renewals programme is delivering a smoother ride. Trains and stations have never been cleaner – and we’ve eradicated graffiti. Central line trains are almost three times more reliable – thanks in part to an £80 million overhaul we finished 30 months early and a new maintenance regime.

What investments in security are you making?

We have made substantial improvements to security both in depots and at other locations, partly to prevent people getting in and daubing our trains with graffiti. I have already mentioned the high quality CCTV we’re putting in at stations, where we will also install information and emergency help points. All our new trains will be fitted with CCTV as will the refurbished fleet on the Waterloo & City line, when it reopens in September.

What is your relationship with London Underground like?

I meet with Tim O’Toole, the managing director of London Underground, on a regular basis and we have a good working relationship with him and his senior team. Tim wants us to be successful and we are working very hard to ensure we delight our client in that respect. We also work closely with Tube Lines, the other infrastructure company responsible for the Northern, Jubilee and Piccadilly lines. There are clearly certain synergies.

Has the fact that London is now hosting the Olympic Games put any pressure on Metronet to perform?

The PPP already places considerable onus on us to perform but it is important to note that the transport section of the Olympic bid was based in part around what the PPP would be delivering anyway. By 2012 we will have refurbished or modernised all 150 of our stations and renewed track. New timetables are already delivering 10 per cent more trains into peak hour service on the Central line, which will take people to east London for the Games and we will have introduced new trains to the Victoria and sub-surface lines.

If you were not working in the metro industry, what would be your ideal job?

I have worked for much of my career in the rail industry and with metros in particular. It’s an exciting business and we have a real opportunity to deliver what was the world’s first and best metro into something world beating again. I can think of no better job than this.

Thank you for your time.