Sir Peter Hendy CBE – Chair of Network Rail

thanks for being with us today on Transit unplugged I'm your host Paul comfort and today we have an exciting interview for you sir Peter hendy chair of network rail in the United Kingdom longtime Transit leader throughout the world is our guest today it's a great interview we wind down the road of his career in public transportation starting really as a bus driver in London working through his time as head of Transport for London and now his role overseeing the United Kingdom's rail network and we take look also into the future about what's going to happen in public transportation this year and and looking into the future and how some of the changes that are coming actually could be a benefit to help reduce some of the um high peaks of Demand on some of the rail networks and making it more efficiently I think you'll really enjoy this long in-depth Rich interview with sir Peter hendy chair of network rail what does it mean to be a successful public trans Transit Agency what are you doing to lead the way it's time to learn from the top Transit [Music] professionals this is Transit unplugged with your host Paul Comfort welcome to Transit unplugged I'm your host Paul comfort and today we're excited to have with you one of the world's leading experts in public transportation sir Peter hendy calling in from London in the United Kingdom sir Peter thanks so much for being a guest with us today on Transit unplugged it's a pleasure to be with you Paul sir Peter and I I first met him I don't know maybe five or six years ago we were just talking uh APTA the American public transit Association where he was a speaker and I was when I was head of the MTA in Baltimore along with Andy biford we were all up on the stage at a closing event in Los Angeles several years ago back when we could travel and I followed your career suer Peter and so excited to have you today in your role as chair of network rail there and United Kingdom yeah well it's nice to be with you Paul and yeah I can remember the days when we used to travel now seem and now seem a year away but that was good and I and I and I follow the transit industry in the US when I can and of course actually today we're all in the same boat wherever we are in the world with this terrible pandemic so I guess we'll touch on that too yes yeah why don't we start with going back and talking about maybe you you've got such a rich history in our in our industry and I'd love to hear and I think our listeners would love to hear tell us some of your background your career and how you got started and where the roles you've had there at tfl and now there and all the other spots you've had just take us five minutes through your history I'd love to hear it if you don't mind well what you mean is I'm an old man that's what that's what you mean now I've been around a a long time and I started well actually I drove buses when I was a student so I had a bus driving license in the UK when I joined London transport as a graduate the old London transport as a graduate trainee in 1975 and I worked through in in those days you had to be a job that doesn't really exist anymore a conductor collecting fairs at the back of the bus I'd worked through a lot of departments I worked as a personal assistant to a famous chap who's dead now who became the chairman I drove a bus for London transport and then I did all the jobs supervisory jobs briefly ran a bus garage and then made my way up in the hierarchy of what was then a very large unionized undertaking with 30,000 drivers and conductors then we started in the 80s on uh what was a Devolution move the old London transport was a very centralized L huge centralized organization it had the biggest bus fleet in the world at one stage and I wound up running one of 11 newly formed bus companies we went through a lot of structural and cost change which won't be unfamiliar with your readers but was quite unfamiliar in 1989 at least in in in London and then the company I ran called Center West was privatized and we in 1994 and we bought it as a management and employee buyout with the Venture Capital with Venture Capital Money very happy to run that for two and a half years we bought another company we started the work of becoming the operator for a light rail system in South London and then we we sold the company to first group in 1997 really that was forced on us because British venture capital is a very shortterm funding proposition sadly we made them a lot of money we made quite a bit ourselves for which I'm of course very grateful I worked for first group for three years I not only ran the company that I that they bought I ran and others in London and Southeast England we opened the light rail system in Cen I became a director of the first group joint venture with new world which took over 80 odd routs in in Hong Kong in 1998 and then Transport for London was formed as a new mayoral agency in the year 2000 and they advertised for somebody to manage the London bus Network and I thought well I'll do that so I went back to the public ctor in 2000 I work with a man who many of your listeners will know Bob Kylie who came over Ken Livingston's invitation to be the commissioner and when he and Ken fell out in 2006 I became the commissioner a job which I did both firstly for Ken Livingston who was a very radical left-wing mayor and then for Boris Johnson who was an equally radical but a lot more right-wing M and I did a total of nine and a half years doing that job that's the longest anybody's run public transport transport in London not just public transport it's the longest anybody's run it continuously since Lord Ashfield who did nearly 30 years and he died in 1948 so I wasn't going to beat him and then and then we went through the terrible events of the 7th of July we went through the Olympics which was fantastic and a great success though many predicted it wouldn't be and then in 2015 the government rang me up one Friday afternoon and said would I be interested in being the chair of the national rail infrastructure body and in less than two weeks I'd been appointed and left so this is allegedly a part-time job and my wife would laugh if she heard me saying it but I don't I'm not the chief executive so I don't feel the need to wake up at halfast 6 every morning and look at operational performance that's uh I've got wonderful chief executive now called Andrew Haynes and that's his job my job is to help him run the company that's the job of all good company chairman help help run the company help the chief executive and the executive succeed and help manage the relationship with the funders who in our case the government and I've been doing this now since July 2015 so that's coming up to KY trying to think of it now on 2016 17 18 19 20 so 21 I have done six years I think yeah one two three four and I'm told I might get appointed until 2023 and that probably will be enough actually so I I don't know I mean the thing I would say is many many people here say to me oh well it was obvious you were going to be able to do all these jobs and it was career was your career was set out and you knew what you were doing actually every one of those steps was fortuitous I think and I mean I certainly when I went to tfl to run the bus Network that was my dream job I was in charge of the whole bus Network in London which is I spent my whole career doing bits and pieces in the bus industry and when Kylie and Ken fell out I wasn't really very keen on applying for the job actually it's only because the prospects for somebody else doing it who I like were fairly limited so I thought well stuff it I'll Appo I'll I'll apply myself and I got it so I'd like to think it's it's been a good career but I've never thought oh well I'm destined for all these things I've I've always been surprised by how far I've got and I'm sure that that will resonate with many of your listeners yep now you have a Knighthood right you're a sir so tell us a little about that and when you got that and I mean that's such an awesome thing and a lot of us here in America we always hear about Sir this and Sir that and and I don't know if everybody's really familiar with how that works would you mind sharing that for a few minutes unlike a good Republic which is the u USA even though the events of the last few days it's a good Republic Britain is a Britain is a monarchy and the Queen and her ancestors have always bestowed honors on on on people who are considered in some way worthy of Merit in fact I've got two I've got something called the commander of the order of the British Empire which sounds terribly Victorian and I I I got that after the uh terrible events of the 7th of July 2005 the terrorist attacks on the buses in the underground and then much happier circumstances I was given a nigh Hood after the Olympics and I think really the truth is I mean they Rec those awards are recommended by government they're not they they they are the Queen's honors but the government put forward the names and I mean in both cases they're not really mine they're owned by the entire people who worked for me and work for transport for London in 2005 and 2012 I I regard it as reflected glory and of course with the Olympics many many many people predicted that it would be a disaster that the transport couldn't cope that transport would be the weak link and actually it performed faultlessly so I don't think that I'm brilliant Paul I think that I was and still am lucky to have great people around me and I regard both of those honors as a huge reflection on the competence of Transport for London as an organization and indeed when I shuffle off this this Earth as I will one day I said to my wife and kids that the medals that you get I want uh give to the London transport Museum because they they belong to transport for London I I just happen to be the lucky holder and it's all very Grand and you get invited to Buckingham Palace and your family go along and with a Knighthood you kneel on a on a velvet cushion and the queen touches your shoulders on each side with a sword but the real Joy is the recognition for the organization about what it's achieved because just like the us a lot of people think that Transit organizations are never going to be successful that the people who run them aren't much use that the staff could always work harder do better and get paid less and I think we proved in the case of the Olympics that we could cope with whatever was thrown at us in a way that actually delighted the government and the nation and was good fun actually though I wouldn't say it wasn't stressful because it bloody world was yes I can imagine speaking of good teams and and I think you show great grace in sharing that honor with others but I mean you were the one that got it and you were the leader and so I mean it's it it's a great recognition of the role you've played in making public transportation work so well in stressful situations a couple of my friends from Australia I just wondered if you knew them Howard Collins and Neil scales both of those guys are obes too yeah yeah they are well because they're both uh they're both Brits and Neil Neil Neil's actually Neil must have been there 10 years now but how Collins was the chief operating officer of the underground and he um he he is part of the Olympic success in fact not in this room in my office at work I've got a picture of uh how Howard and I and Mike Brown and Veron Everett in front of the top bus that we took the Olympic flame down O Street which I drove actually and um no how Howard's a great gu because he's doing a wonderful job in Sydney yes and I know that you've also interview Jone wyar who uh is a prote of mine who uh was running public transport Victoria and well of course now we've got Andy bford back who who is so he refers to me as O2 because I was the second commissioner and I refer to him as 04 and Andy is a brilliant brilliant brilliant Transit manager and he'll do a fantastic job at at at tfl so it's it's it's I'm sure just as in the US it's a family one of the other people that you've interviewed in the past I think is Doug Kelsey who used to be in Vancouver and Doug came over twice three times I think and audited what we were doing for the Olympics because he'd done the Winter Olympics and surprise surprise his experience in Vancouver was just as applicable in London he taught me in big public events what you do is get hold of barriers and portable toilets and he was absolutely right and I think one of the great things about the transit industry is that is that it's not a selfish industry people will share whatever they've got I'm in touch more with Howard because because I work with him then I with Neil but Howard sent me pictures of his fantastic steam engines on the on the um New South Wales Railway Network and and I've discussed industrial relations with him because the Australian unions are pretty much like the British ones MH well I I call it the diaspora these great leaders coming out of tfl going through the Commonwealth and I think it's awesome so tell us you you mentioned Andy biford let's talk a little bit of Transit now that's and I really appreciate you sharing with us your background what a what a great story and and for people in our industry to emulate I think you're a great leader to do so but tell us about the relationship now between tfl and network Rail and then let's let's start transitioning to you can tell us more about Network rail what's happening now I know during the co crisis and all that and walk us through that a little bit okay so so so tfl so so I mean many of your listeners in in in the US will be very surprised but the concept of a city mayor is a very relatively new one and the mayor of London was really the first one to be established in 2000 and tfl as a as a Citywide Transit organization is therefore only 20 years old and it's taken time to establish but I think that the that the what it's achieved and the why it's done it have been very powerful two things I'd say one of which is it's quite it's it's really comprehensive so tfl unlike the old London transport is not any buses Subways but also heavy rail Light Rail feries taxi licensing and you will discover like I did that's a pain in the neck but hey that's what you got to do and and it's very comprehensive the other great thing about the minority is that it's set up so that the mayor is obliged to write a long-term strategic Economic Development and spatial development plan for the city so then there's a transport strategy which is longterm and tfl's job is to enact the transport strategy and those two things are very significant because too often and I'm sure the same is true in the US it's a short-term business with no long-term funding with no long-term aims and with great difficulty justifying Capital exp expenditure and in my time at tfl we managed to get a long-term funding settlement for Capital and we managed to do some really significant things now when I mve to network rail network rail is a different sort of body because I'm appointed by the secretary of state who's a national politician Network rails an infrastructure company though it does control signaling s has a lot of control over the operations and the railway is not comprehensively managed which has caused us some considerable crisis actually because a government Department letting franchises that don't fit on the infrastructure uh an infrastructure plan that isn't related to service level provision is not optimal it results in a waste of money and too often it's resulted in poor service for passengers so Network rails are really a rather different body and one of the things that I'm doing with Andrew Haynes with many colleagues in the railway industry which I think has been hastened by coid is to work with the government to try to get a new structure for the British Railway Network I've seen it written in Europe and and overseas that FR Railway franchising has been a great success and it certainly increased the volume of passengers but I can tell you that when it gets to the stage of overfilling the network with trains and not having a coherent level of uh information or Affair structure that people can understand and it has its limitations so we're now working very hard and we're expecting in British terms what the government call a white paper which is a statement of strategic intent maybe even in the next few weeks from the Secretary of State to say he'd like to run it differently and he'd like a more strategic organization to overview the railway and I think he I think that would be right and in my in in my book that would be a great thing to to happen cuz my lesson from tfl is you can spend money more wisely and deliver a better result if you've got control over all of the levers interesting so the structure right now as I understand and I I was over there last year and got to ride some of the trains and had a great time went out to Cardiff one time and then did the overnight train up to Scotland and just what an awesome rail system but so right now you have basically what 20 some rail operating companies running on your infrastructure and now during coid you had to kind of backfill some of their funding right tell us some about all that so so yes that's absolutely right so the the rail companies are by and large but not wholly private sector they they they have been acting on contracts led by the government led by the department sport to run on our infrastructure and we're wholly owned by the government but but we're a different sort of body and all of that came to a a grinding halt when coid started because the ridership just fell out to zero government advised people to stay at home so their contracts had to be altered virtually overnight to be in effect cost contracts with very narrow margins and the old system where they were encouraged to take Revenue risk has fallen away now we're not likely to see Revenue risk transfer back to the private sector here for several years nobody now would take a contract of that sort and uh I think that I think I think government would like the private sector to take some Revenue risk there is some sense in people who operate trains getting a reward for the amount of money they collect and the number of passengers they carry but it isn't going to happen anytime soon at any significant risk level because these operators have got no more idea than we have about what the future volumes of business look like in those circumstances then uh let let's suppose the sake of argument that the one white paper suggest setting up a rail body which would consist of network rail what we do in running infrastructure and what the Department of Transport were doing and running franchises and I think part of the common sense of that is that actually you can use public money better if you balance the integration of the franchising and the use of the infrastructure than if you do it separately and and I mean my word we we've been fantastically well supported by government in the sense that it that they've been shelling out 750 mli million a month to run this system with no passengers on it for for for nine months so we can't argue we're not being looked after but I think we can argue that we should spend the mo the least amount of public money that is possible in the most effective way to run the railway and that and that's work in progress it it doesn't negate what what my chief executive Andrew is doing to get better mainten get better state state of repair and uh make better use of our resources but it it's it's a lay on it that we don't have and the other thing Paul I'd say is that we currently we don't have a long-term strategic plan for the industry and that's in compared with my tfl experience so in tfl I knew which the next project was going to be if the mayor rang me up on his way home wobbling home on his bike after a good dinner and said why don't we do why don't we build another cable car I was able to say to him well let's not do that Boris let's do crossr because it's the top of our list and it's got the best financial case and and that actually is a true story and and that's why I supported it but in the railway we can't do that because we don't have a strategic plan and I think that's a huge disadvantage as much for anything else because you'll know and your audience will know these projects take a very long time to bring to the point at which you can fund and deliver them and if you don't do the preparation they go wrong and they go badly wrong and we've had some which have gone wrong through lack of scope definition and and inadequate preparation and I don't want to be anywhere near the next ones I want a long-term plan and we know of course it's government's choice where they spend their money but the best thing we could do is to say when you want the next thing to do in the north of England here's a scheme we know the business case is good we know how much it's going to cost to deliver and we can start delivering it I think if the secretary of state was on the call he would claim some credit for advancing that but that's what I'm hoping to read in the white paper because that's where we should be you think that'll lead to like a United Kingdom Railway kind of a thing or well I think I think that's in his mind and the and the and the prime minister's mind I mean there there there is some sensitivity to it because transport is devolved in Scotland and Wales right but of course actually the railway infrastructure isn't the railway infrastructure is ours and I report to the Secretary of State and I mean there are always those in any in any government hierarchy there are those pressures I think there are some in the US between the federal agencies and the states but truthfully having a plan and doing the best projects well is in everybody's interest sure that's good tell us what you see kind of from your perspective as the future of for our whole industry say so taking a broader perspective than just Network Rail and tfl I mean I'm sure you follow all the same numbers I do from uitp that ridership levels are still way down 50% in some places still and so does the role of public Mobility need to change I mean where do you see us going as an industry worldwide it's a really good question isn't it I've been asked that several times in public and and I think well I think we're at the end of the beginning as Church who once said about the war not beginning of the end I can't see volumes going back to the previous 100% because although I probably enjoyed working at home five days a week or six days a week no more than you do actually we've all proved we can do this we proved that we can have an adequate conversation across the other side of the world on on on Zoom you know maybe volumes are 70 80 or 90% I'm not worried about that I mean the interesting thing in London I look at tfl statistics because I send them they very nice of them bus ridership before we had a the latest lockdown was at 50% the subway was about 35% but car volumes on the road vehicle volumes are at 95% yep so there's no choice that everybody can travel in their own vehicle just because we've had coid mass transit is here to stay the question is what does the demand curve look like I think the other outcome of this which I foresees that people are not going to be half so willing to pack themselves in in the way that they used to that actually my morning journey to work from where I live now in Southwest London if there was any disruption at all I'd have to run at the doors and force myself in before they shut well I think there'll be much less willingness to do that in the next several years because I think covid will all get vaccinated but it won't mean it won't be there anymore and we've looked at some of our big investment projects on the railway we see that even at 80% volumes a lot of them are still Justified I might be an old man now Paul so other people who might have a different view but I'm not persuaded by either the prospect in a city of 10 million the size of London of neighborhood living nor about autonomous vehicles mass transit is the only way that you fill up the central business district with the people with the most economic productivity and I think many people will want to get back to that but they may not want to do it five days a week and if we wind up with transit systems with lower Peaks and a higher off peak actually there there ought to be a lot of people listening to this you say thank God for that the peak IM balance creates a huge amount of expenditure Rolling Stock track capacity and if it wasn't there you could manage a much more effective Network at much cheaper cost be a lot more efficient wouldn't it it would yeah you know the last train the last train into London Waterloo does one Journey it's 12 cars it costs a huge amount of capital it occupies track space that you could probably rationalize it occupies Depo space actually the system is there to serve the public interest so if those people present themselves we should be trying to carry them to to help them make productive work but if they've changed their methodology of lifestyle and they only want to travel three days a week and some of their colleagues don't travel on the days they do actually we shouldn't be upset by that I don't think yeah it's funny I was just talking with Joshua shank who is the head of the office of innovation at Los Angeles metro he's our guest this week on the show that you and I are talking and he told me something which I thought was a really good kind of like Paradigm Shift basically the thought that in Los Angeles they've made a shift in thinking that the role of Transit isn't just to stuff people on busz and trains it's actually to reduce congestion and to improve people's Mobility getting them out of single occupancy cars and so that could include you know bike riding other things and so I mean what's your thoughts on that is is the role of Transit not now just to have ridership well I mean absolutely I'm I'm further back than he is I mean one of my jobs at Network Rial is to alter what we put into the public domain and start it by saying that connectivity is the best means of of facilitating economic growth job creation h building houses and social cohesion and that's why people want it and the transit industry should be there to deliver those things it's not it's not transport for the sake of it except for enthusiasts it's got a purpose and and it's worth investing in for that purpose and as habits change we should adapt what Transit is there for to address the issues the sustainability all over the world in cities is a really big issue biggest issue that the mayor's confronted successfully in London in the last five years for last four years since he was elected five years is is air quality and there's no doubt that Transit has a huge role to play in better air quality which kills people right that's good yep yeah so I think coming out of coid maybe that's one of the Silver Linings is it's given us an opportunity to realign what our purposes are thoughts on that yep absolutely and the other opportunity it gives is to actually think again about the way in which you interact with the people who are traveling now I'm lucky at tfl because I had some great colleagues and we revolutionized the fair collection and information systems to respond much better to customers in this pandemic the use of cash for example has almost dropped to nothing right everywhere except on the railway where we still expect people to exchange folding money or coins for a cardboard ticket actually look at that in the modern era and say this is nonsense I go out now with a credit card that that's all I need credit card and house keys it's all I need to buy bread whatever hasn't hasn't turned up with internet shopping and Transit is other than in London actually in the UK is the virtually the only big thing left where you still need money and it's nonsense so we have to rethink how this works for the benefit of the people who we serve and who pay for it through taxes that's great any last thoughts as we wrap up our interview today I mean uh I wanted to talk about the two route Master buses you've got oh yeah and all that fun stuff but any any things you want to share at the end here well I think I I mean uh all I'd say is I think there are a lot of secret enthusiasts in the transit industry one of the things actually one of the things I'm proudest of of at tfl is that we ran a steam train on this on the Underground on the 150th anniversary which was nothing but huge fun but but actually served a great purpose in publicizing the system and how old it was I'm on unashamedly Enthusiast so my two buses haven't been out much this year but they'll be out as soon as we can get them out I raise money for charity with them it's really interesting just like the subway in New York and the image of London is a mixture of underground trains and big red buses and I think we should be proud of being part of the city shouldn't we and and on the National Railway Network I'm much in favor of running steam locomotives they're a source of huge pleasure for many many people and and they prove that we are human beings in running it they prove that we've got a sense of romance and place of the place of the Railway in people's lives and I think I think Paul it's really important that's great thank you so much sir Peter hendy for being our guest today on Transit unplugged what a legacy you've had and I can't think of anybody better to be in the position of leadership as you potentially transition how the whole of network rail runs in the United Kingdom and as an example for the rest of the world thank you very much it's pleasure to talk to you Paul you've been listening to Transit unplugged powered by trapes group to stay up to date subscribe on iTunes or Google play or join the conversation at Transit unplugged. thanks for [Music] listening