Once Strategic Rail Authority boss, more recently Etihad Rail boss, and now EC Harris senior advisor, Richard Bowker has heard all the arguments for and against spending on infrastructure. Two weeks ahead of the next spending review, Mark Hansford finds out where he sees the state of play.
The last time Richard Bowker worked at the coalface of the UK rail industry it was as chief executive and chairman of the Strategic Rail Authority (SRA), the ultimately doomed government offshoot with the poisoned chalice of setting the direction for the dying Railtrack and its fledgling successor Network Rail. That was in the early 2000s and it was a gloomy time for the industry.
Indeed, Bowker’s SRA was more often than not in the firing line as lack of cash forced unpalatable decisions to cut services and gloomy prognoses over the prospects of future upgrades. It was in Bowker’s era that Thameslink 2000 was shunted back to today’s post-2015 completion date, and even Crossrail was disappearing into the long grass as part of “a longer term vision”.
From that investment-deprived environment he went first to National Express and then to Abu Dhabi and theEtihad Rail project. It’s fair to say the experience was somewhat different. “Etihad Rail was an incredible experience,” Bowker says. “I hadn’t actually been based overseas before. They were wonderful people with an incredible vision.
“We have got good ideas. But the National Infrastructure Plan is far too much a list of schemes than a coherent plan for national infrastructure”
“In the UAE the vision for Etihad Rail was very sound,” he adds. That vision is for a network extending approximately 1,200 km across the Emirates, catering to both freight and passengers. Project promoters believe it will connect urban and remote communities, facilitate trade, open up communication channels and foster economic development. The network will also form a vital part of the GCC Railway Network - linking the UAE to Saudi Arabia via Ghweifat in the west and Oman via Al Ain in the east. It all began in 2009 when the company was formed, and Bowker was there pretty much from the get-go.
“I arrived when there were four of us and left three years later when there were 134 of us,” he recalls. “I created the business plan, corporate structure, started the tendering and let the first contracts.” So why leave? “We were about to move into full construction and it felt like a good moment to leave,” he says, explaining that with a young family the alternative would have been to commit to stay for the duration.
He’s clearly slightly rueful that he made that choice. “The speed they are going at is marvellous. They are so passionate and enthusiastic,” he says. “Yes, they have got all the resources. But once they have made the decision to invest - and that in itself is not the quickest - there are not many challenges from then on.
“Here, it’s all delay,” he notes. “We have got good ideas. But the National Infrastructure Plan is far too much a list of schemes than a coherent plan for national infrastructure.
“Within that there are good schemes. But it is getting them in the ground. Overall it is a big challenge,” he says.
It could almost feel like Groundhog Day for Bowker, 10 years on from what was probably the SRA’s nadir: the January 2003 update of its strategy - just one year after it was first announced - which downsized some schemes and delayed others because of spiralling costs.
Some schemes in the SRA’s original plan have now been built, such as the reconstruction of Kings Cross St Pancras and the four-tracking of the West Coast Main Line’s Trent Valley line, which gives Bowker some cause for optimism.
But he remains frustrated at a broader inertia. “If you look at the world since 2008 you can understand the desire to rein back spending. But you could cut capital expenditure so much that you get very little growth, and still have inflation, and so go backwards,” he observes.
“Infrastructure is a good place to invest as you get a multiplier effect,” he adds, echoing last month’s findings from the Civil Engineering Contractors Association that every £1 invested in infrastructure yields an immediate £1.30 return in GDP and a longer term £2.84 return on your investment. “So it was disappointing in the budget not to see more momentum.”
“There is a general consensus that capital expenditure on core infrastructure has got to be part of the solution”
And as government looks forward to the forthcoming spending review, Bowker believes the industry needs to ramp up its case. “We need to get better at arguing our point,” he says. “One of the things that attracted me to EC Harris is it has got people who can argue well.”
This is going to be important in the coming weeks. “I sense that elements of government are on board, but others worry about borrowing or debt,” says Bowker. “Sometimes that is not a bad thing, but right now they need to be a bit braver.”
But he does believe that the Treasury has in commercial secretary Paul Deighton a “good thing”, a man “who understands infrastructure”.
He also applauds rival, Labour-backed efforts by Sir John Armitt to review infrastructure delivery.
“John Armitt is creating an excellent debate around infrastructure delivery,” Bowker observes. “Labour may have commissioned him, but because it is him, it transcends party politics. So it is all good. We just need to get to the point when the noise is so loud and so aligned that it is difficult not to do it.
“I know the last few years have been tough but it feels like we are at that tipping point,” he adds. “There is a general consensus that capital expenditure on core infrastructure has got to be part of the solution. So whether it is John Armitt or Paul Deighton it is what comes next that will set the course.
“And there are positive signs,” he says. “We have Crossrail. High Speed 2 is progressing. There is a huge government-backed investment in railways. They are no longer an embarrassment to it. That’s exciting.
“Now we need something really positive from the Aviation Review,” he says. For Bowker that is a very important marker. “As a country we are good at reviewing. But now we have to actually do something,” he says.
BOWKER ON EC HARRIS
Richard Bowker has joined EC Harris as a senior advisor with the remit of providing strategic
advice to the firm’s infrastructure clients, with a particular focus on rail in the UK and Middle East.
EC Harris works with clients in the transport, utilities and energy sectors to help improve their business performance. It does this through a range of commercially-focused services that drive savings in capital and operational expenditure programmes, optimise the performance of assets and minimise risk.
The UK has an infrastructure pipeline of over £310bn, much of it relating to major programmes in rail, highways, nuclear and offshore wind, while the Middle East has a predicted infrastructure spend of more than £640bn over the next 10 years as these nations develop at an unprecedented pace.
And for Bowker, that’s exciting. “These are complex asset management systems, where there are lots of trade-offs and financial and economic decisions. It has moved from being an engineering dominated debate,” he explains. “And that’s why I am excited about it and why I joined EC Harris. It is full of very talented individuals who can look at assets’ whole life cycles and say what we need to do. It is a smart way of thinking.”
Rail, understandably, is a big target for EC Harris, and Bowker believes the firm has much to offer the likes of Network Rail and London Underground. “In the rail sector there is the opportunity to do quite a bit more,” he says. “At their core are Victorian assets that have got to be managed and sweated harder. So they have got to get smart about whole life costs.”
Bowker acknowledges that both organisations are already success stories, with record numbers of passengers being carried, but believes there is room for more long term thinking. “You only achieve that success when you have some very, very, good people,” he says. “We think that we have got some really complementary skills that can help them think about their assets in other ways. We can bring experience from other sectors into play.”
That “something” is first to formulate an actual plan - as opposed to the current wish-list that is the National Infrastructure Plan - which Bowker accepts could be drawn up by an independent body as understood to be favoured by Armitt. This, of course, would not be wildly dissimilar to the role of the SRA in Bowker’s past. So for him, the real key is what comes next - actual delivery.
“One of the real challenges is the future delivery model,” he says. “And the real key is finding the right execution strategy. We need private sector delivery, but with the correct accountability.
“Where it goes wrong is when the public sector gets involved. Whitehall is just not trained to do project delivery,” he insists. “We have firms like EC Harris with incredible skills and execution strategies. That to me is essential, and the Olympics was a classic example,” he says, citing the on time, under budget delivery of the Olympic Park through the CLM delivery partner joint venture. “We have incredibly talented people. We have a need and we have an industry that can deliver that need.”
Bowker accepts that each project or programme needs to be assessed on a “case by case” basis, and that London Underground, for example, with its “terrifically complex set of operational and capex challenges”, has in the last few years done a “pretty good job” at turning things around.
But he insists that on the whole - whether it is building a new railway, road, power station or school - the private sector is best placed to lead.
“But there is a big difference between abandoning everything to the private sector and setting clear, outcome-based deliverables,” he stresses.
This is something Bowker is well placed to pass comment on, having been at the helm of the SRA as the privatised Railtrack morphed into the “not for dividend private company limited by guarantee” Network Rail.
“Railtrack was a model conceived in one way and delivered in another,” he explains. “It was never set up to be privatised, and the regulatory model was not set up to cope. That was a jettisoned business.
“We have firms like EC Harris with incredible skills and execution strategies. That to me is essential”
“You could now argue that Network Rail is getting closer to the right model,” he adds. “HLOS [the High Level Output Specification] sets the targets and the regulatory process is in place.”
Many people are currently arguing for a similar model for the Highways Agency, not least because Network Rail’s official private company status - despite its hefty public subsidy - means that its substantial debts are off the government’s balance sheet. Bowker can see the merits, but urges that people should not to get hung up on the financing.
“It worries me slightly when we end up focusing on accountability arguments. At the end of the day it is taxpayers’ cash, “he says.
“You can’t get away from the core argument that investment in infrastructure, if well executed, is a good thing.”