McIntosh moves to safer ground: “The relationship with the DfT is one that’s getting much better, particularly with regard to the enhancements portfolio. The Bowe report pointed out some home truths to both NR and the Department about how the ‘once in a generation’ investment portfolio was not being managed. As a result of that, we have a very good governance structure in place and a good working relationship with the Department which is unlike anything I’ve seen in my career, in terms of the maturity of the approach the Department is taking.”
McIntosh is in his stride now: “The other part, when you said ‘is NR ready for devolution?’, is that NR is culturally in a state of change in a good way. NR came from a place where we were effectively self-funding, marshalled by a regulator. So we would go and borrow the money that we thought was needed to maintain, operate and enhance the railway, and we do that with the DfT and with the regulator.
“They were the three parties, and consequently one of the bits of feedback I get from local stakeholders is that NR would go and tell the stakeholders what they can or can’t have. What they won’t do is work with them to understand what it is they really need and how we might realise it. That’s quite subtle, but it’s a very different interaction.
“We’re doing a lot of work with the leader of Leeds City Council, because it is very keen to work with us to redevelop Leeds City station as the catalyst for a much wider redevelopment of the South Bank area. The first person that it got from NR (some years ago, I might add) came up and the opening line was: ‘You can’t have a St Pancras or a King’s Cross’.
“So immediately, they are turned off. Which is just wrong. The reason for making that point is that we’re going through a change where we realise that NR was nothing more than the custodian of what I believe is the country’s most valuable asset - its railway. I would say that because I’ve been in it for most of my career, but it is an incredibly valuable asset.
“But it’s a public asset - NR just happens to be the custodian of it at any one point in time. So, rather than being an organisation that does what it thinks it should do with that public asset, NR needs to make sure that that public asset best serves the communities and economies. Or is best managed and enhanced to serve the needs of communities and economies that it serves. That’s a big change from where Network Rail has been.”
There’s a nagging contradiction here. NR cannot claim that government (national) is not a customer and then paint government (regional or local) as a customer. If, in future, Leeds City Council can specify and fund NR to deliver railway improvements, then it will be just as much of an NR customer as DfT is today for specifying and funding enhancements.
The reality remains that many bodies pay NR and expect a product in return. NR must treat them all as customers, while not forgetting that in many cases those bodies are intermediates between NR and the ultimate customers - passengers, freight shippers and taxpayers.
Unless someone has a spare £500 million, then the person who told Leeds that it couldn’t have a King’s Cross or a St Pancras was simply being realistic. Rebuilding Leeds was one of Railtrack’s successful projects, costed at £165m back in 1999, and it transformed the station.
McIntosh worked on the project: “We rebuilt it for a quarter of the footfall it now has. We’ve just opened Leeds Southern Entrance at the turn of the year. So I think there is plenty of… well, June 24 might have changed things, but until June 24 there was plenty of investment out there. One of the key objectives I have as a Route Managing Director in a devolved route is to realise private investment onto the railway. And even from the very preliminary enquiries that we’ve made, there are plenty of people who would like to invest.
“It’s about firstly doing it on an equitable risk basis, and what a reasonable amount of risk is for a commercial organisation to take versus what NR and the Government can underwrite. But also who enables that investment. When someone wants to come and invest in the railway at the moment, it’s a really difficult experience for them. We have a team of guys called ‘asset protection’ - so by definition they’re there to protect NR’s assets, not enable that investment, because that’s what we incentivise them to do. One of the things we’re considering is taking that team and calling them ‘asset enabling and investment’, so that we can make it easier for investment to happen in and around the railway.”
Asked why an investor would be interested in Network Rail, given its disappointing record in delivering major projects such as the very late-running Great Western electrification project, McIntosh argues: “You’re jumping to the conclusion that NR has to deliver that investment.
“You need to explore how that would happen. NR should not be the default setting for delivering the investment. We have a huge investment portfolio at the moment. That investment portfolio’s been re-baselined, been refocused under the Hendy review, and we have to deliver against that commitment.
