Network Rail was this week beginning the hunt for a new chief executive after Iain Coucher said he was standing down after eight years with the business.
Coucher said that he could not see himself staying at the company for another five years and that he has decided to go before negotiations over the rail operator’s next five year spending period begin.
This runs from 2014 and discussions with the regulator are due to start in early 2012.
“Following three years as chief executive, and five before that as deputy, now is a good time for me to move on,” he said. “The company needs continuity of leadership throughout the next five year regulatory review period.”
Coucher has said he will stay at the company until a new boss is appointed and that he will be involved in the selection process.
Long line of changes
But he becomes the latest in a long line of senior changes at company since Rick Haythornthwaite took over as chairman in March 2009.
“It is no coincidence that Coucher has gone soon after the company got a new chairman,” said a leading head hunter. “It was almost inevitable.”
It is expected to take up to take up to three months to find Coucher’s successor. “It is going to be very, very difficult as it is a poisoned chalice,” he said.”The fact that they have a good chairman with a good track record will be an attraction. “They have got to find somebody who is a good leader and has the stature to work with government is crucial.”
Industry sources said they expected the Coucher’s successor to be Haythornwaite’s personal choice. The former chief executive of software firm Invensys has been actively restructuring the company’s board, appointing four new non-executive directors since January.
Current Olympic Delivery Authority chief executive David Higgins, former South West Trains chairman Graham Eccles, former Highways Agency chief executive Lawrie Haynes and former BAA board director Janis Kong have all joined the board.
Current non-executive directors Ian Buchan, Yvonne Constance and Chris Green will all stand down before the company’s AGM in July.
“Strengthening and enhancing the board has been one of my priorities since joining the company,” said Haythornthwaite.
“I believe that the current cadre of non-executive directors has done an excellent job… from bringing Railtrack out of administration to a functioning, capable railway that is operating at record levels of safety, punctuality, reliability and capacity.
“Today we face new challenges and opportunities and the composition of the board must reflect that. The appointment of these highly-experienced and capable individuals gives Network Rail renewed corporate oversight.
“This will be vital as we continue our job to deliver a high-performing, bigger and better railway.”
Network Rail is seeking £5bn of efficiency savings in its current five year spending cycle.
But earlier this month it was heavily criticised by the rail regulator for failing to deliver the full extent of efficiencies demanded (NCE 10 June).
Office of Rail Regulation chief executive Bill Emery said the operator must “redouble its efforts” if it is to meet its target of 21% efficiency savings.
Coucher disputes this claim. Last week he told NCE that the regulator was unfairly measuring the operator against the regulated spending programme rather than its own business plan. This has been structured so that the pace of efficiencies picks up towards the end of the spending cycle (News last week).
Regardless of this, Network Rail’s spending is set to come under intense scrutiny after transport secretary Phillip Hammond ordered the acceleration of a review of value for money in the rail industry.
Hammond wants the review, being led by transport industry expert Sir Roy McNulty, to report back in time to inform this autumn’s Comprehensive Spending Review.
Industry insiders said this report is certain to reveal UK rail infrastructure to be 30% to 100% more expensive than in Europe.
Treasury body Infrastructure UK is also investigating why rail costs are higher than on the Continent as part of a wider review of the costs of civil engineering.