“Also there’s Karen Letten, who currently works for the DfT and is a lawyer, but who has great experience in corporate financing. She is a non-core member of the team, but is facilitating all the necessary DfT inputs.
“But to be clear, I’m doing this as Rob Brighouse running a project, and not as an NR employee that sits on the board. I don’t see any inconsistency between the two because I know what’s going on within NR and outside, too.”
That partially answers my next question, which is how Brighouse plans to reconcile his new role at EWR with the non-executive directorship he has held at NR since January 2016.
If successful, EWR is intended to provide a powerful benchmark for NR that is widely expected to expose gaping flaws in NR’s scoping and procurement processes as well as cost control. Could Brighouse suffer from any divided loyalties? Cynics might point to a temptation to inflate costs at EWR in order to limit collateral damage to NR, fatally undermining its benchmarking strategy.
“Cynics would say that, but happily I’m not a cynic and happily nor is Sir Peter Hendy, so I have carte blanche to challenge what NR is doing and draw good comparisons,” he swiftly replies.
“I checked out if there was a conflict of interest and there’s not. I clearly delineate what I’m doing with this project versus what I’m doing on the NR board as non-exec director.
“I don’t want anyone to get confused - this is a separate piece of work from my board role. I’m working for the SoS absolutely, no ambiguity, and doing a piece of work for him. My knowledge and connections to NR help me do that piece of work but I don’t report to Sir Peter Hendy, I report to the SoS.
“NR has a key input to play because it holds an awful lot of information and they have some really good people doing some really good work. So I’m drawing on that work - but not as an NR employee, but as the SoS’s agent to do this piece of work.
“From an NR point of view it is good and positive because it will provide a degree of benchmarking - we will establish what these projects should cost, and how long they should take. That will be a really helpful benchmark for NR to compare with what they’re doing, and I have 100% support from Sir Peter Hendy and Mark Carne for what we’re doing.”
He adds: “When you produce a benchmark, which is what I hope we’ll do, you produce a benchmark for a reason, don’t you? And that is to say: ‘there are better and more effective ways to do things’. I’ll say again that Peter Hendy and Mark Carne are really keen to establish that benchmark and see what NR can learn from it.
“Peter is always very keen to see how we can bring private finance into this industry. The thinking is ‘he who benefits pays’, and so that’s what I’m looking at - how can we make sure that the beneficiaries of rail projects are also the funders of those projects? That’s what this will be about, to a large extent.”
Finance is something I try and follow up with Brighouse, but as funding EWR from exclusively private finance is somewhat virgin territory for UK rail, there is little he will say ahead of the scoping report.
He confirms, however, that various models of DBFO (Design Build Finance Operate) are being considered. This could mean that infrastructure is owned by an institutional investor, for example, and then operated as a concession or on an open access basis, perhaps like High Speed 1. Other models of DBFO might result in the investors operating services themselves.
Brighouse is not ruling anything out: “We’re talking about the potential for DBFO. Now, DBFO can be all things to all men, so you can have a DBFO mechanism whereby an investor has a very small team, funds the projects, and then contracts everything out. Or you could have a DBFO mechanism where actually an investor provides the drivers on trains, and then there’s a whole range of other things. Who operates the trains? Who maintains the infrastructure? Who regulates the infrastructure? And again I’ll be looking into a whole range of options.
“I’m talking to people who are interested in being funders, to establish where on the scale is the optimum solution to bringing in third party funding. I’m sorry, but at this stage I can’t tell you what the answer is - I just want to see what’s out there. But if anyone wants to see me, here I am.”
An added complication to the development of a strategy and delivery mechanism for EWR is the construction and development work that is already under way, and which involves NR on the western and central sections.
Evergreen 3 ensured that Western Phase 1 fully opened between Oxford and Bicester in December 2016, but Phase 2 between Bicester and Bedford is currently in development and publicly funded for completion by the end of CP6 in 2024.
Grayling would like to see this work accelerated, privately funded and placed under the leadership of EWR, but not at the risk of reversing any progress made by East West Alliance (EWR2, comprising NR, Atkins, Laing O’Rourke and VolkerRail). EWR2 is engaged in vegetation clearance and is working on an outline construction programme, while NR has also been leading the planning of the East West route’s central section between Bedford and Cambridge, where final routing decisions are yet to be taken.
These are not intractable problems, but a reminder for Brighouse of how far EWR will be required to innovate in order to displace NR’s control over the project.
How does he plan to achieve this? You guessed it…we must wait, and all will be revealed.
“I believe the guys in the alliance and in the central section team are doing a good job, so I need to dig into what they’ve done and see how we can incorporate their work into what we do going forward. Obviously in doing all this I need to be mindful of existing programmes and interfaces, and in looking at things as a whole I want to be careful I don’t jeopardise progress on the western section as it stands. I want to be careful I don’t jeopardise the interface with HS2 at Calvert, and so I need to balance all those conflicting elements to make sure we come up with the best solution for the whole project, so there might be trade-offs.
“One of the key interfaces with NR is the alliance, and they’re doing a lot of work at the moment on the western section in stage 2. We’re looking at that work and getting a handle of timescales and costs, and seeing if there are any areas we can explore to accelerate and bring down costs.
“We’re talking to the central section team over any issues and decisions around that, where we can seize on the opportunity to bring in some private funding.”
He concludes: “Will I come up with a definitive ‘this is what we’re doing and this is how we’re doing it’ at the end of March? Or will I come up with one or two options of ways it could be done? I tend towards the latter, I think.”
