When Rob Holden, chief executive of Crossrail, resigned last week, the company was quick to try to reassure its partners. But questions remain as to why he quit and where his departure leaves the £14.5bn project in its most critical year so far
When Crossrail announced last week that its much-respected chief executive of two years, Rob Holden, was to leave, it caught the industry on the hop. Crossrail’s own chairman, Terry Morgan, was no exception. He says: “When Rob came to me early last week and said he’d made a decision, it was a complete surprise to me. He’d made a decision over Christmas that he wanted to do something else. Obviously I didn’t want him to do it, but by the time he came to me he’d rehearsed all the arguments and I couldn’t change his mind.”
It’s no wonder Morgan tried to get Holden to stay. After winning widespread plaudits for his management of the construction of the Channel Tunnel Rail Link, Holden was appointed to Crossrail in April 2009. This was a time when no spade had been sunk into the ground, and the whole project, though supported in principle by the government, was still on the drawing board. Within two years, construction is well under way with 3,000 people working on the project, the biggest contracts let, and £3bn committed. Holden also navigated the biggest contraction in public spending ever attempted in the UK without major changes in Crossrail’s scope.
The industry seems united in its respect for Holden, but it also seems pretty unanimous in not quite believing the official explanation for his departure. This is that, at the age of 54, Holden wants to explore other career options before he retires and therefore can’t commit to the whole project. Many are asking why such a competent and ambitious rail industry chief exec should leave one of the largest and most complicated infrastructure projects in Europe? And, more importantly, where does his departure leave the £14.5bn project?
There is a colossal job still to be done, simply to get the project fully under way. This is the year when major decisions need to be taken, such as who builds the major stations and how the train systems architecture will work. Holden’s big legacy for the project will be the complete overhaul of its programme, lengthening the build by a year, making it much more deliverable. But the corollary, reorganising the structure to make it fitter for more austere economic times, is ongoing. And the Treasury is yet to sign off on the final funding milestone - needed to award the £1.9bn of contracts that must be let this year - despite identifying money for Crossrail in the Comprehensive Spending Review.
Attempts at reassurance
Crossrail has been keen to reassure everyone that nothing is amiss. Within hours of the announcement of Holden’s departure, a brief statement and Q&A were sent to all its partners, addressing questions such as: “Does this put the future of the project in doubt?” and “Are we a ship without a captain?”
There is no immediate crisis. Holden will work a six-month notice, and the Q&A makes it clear the organisational review will continue. Crossrail has started to look for a replacement and hopes to have one in place by the time Holden leaves in the summer. Meanwhile, it expects a response by the Treasury on its final formal review - known as RP4 - on schedule in March. But Holden’s departure will leave a huge hole. Alasdair Reisner, public affairs director at the Civil Engineering Contractors Association, says: “He was absolutely central to the project. He’s really a hard person to lose.”
It was a complete surprise to me. I didn’t want him to do it but he had rehearsed all the arguments and I couldn’t change his mind
Terry Morgan, Crossrail
Many of those working on Crossrail have questions as to why Holden is leaving. One source close to the project says: “We’ve heard there was friction at the top, some differences of opinion. More importantly, there’s a strong view that Rob really wanted to rationalise the situation, and [in his role at LCR] was used to being able to go straight to government to get decisions made, but here wasn’t given a free hand. But it wasn’t anything that gave us any indication this was about to happen.”
Two separate sources say Holden’s frustration at interference from his political masters, particularly Transport for London, is likely to have prompted his departure. Certainly he made no secret of his frustration at the complex governance structures of Crossrail, which mean the organisation must report to both TfL and the Department for Transport, with separate lines of accountability to the Treasury. In March last year he said the governance “was the most complicated you can imagine” and that “one of Crossrail’s values is simplicity. Things are just too complex at the moment”.
However, the organisation has denied that either this, or the relationship between Holden and Morgan, is behind the departure. Clinton Leeks, corporate affairs director for Crossrail, says: “Holden and Morgan are from different backgrounds and are different kinds of people. But overall they work together well, and this was absolutely not a factor here.”
The area causing the most grief now is reorganising the 3,000-strong Crossrail team and its programme partner, Transcend (led by Aecom and CH2M Hill), and delivery partner, Bechtel. Sources say this is designed to trim the estimated £1bn administrative cost of the programme, amid concern that the bodies were duplicating effort. Crossrail is recruiting a programme control director to work in-house, a role many think would previously have been undertaken by Transcend.
A source at a consultant working on Crossrail’s station designs says: “The idea seems to be to get rid of any man-marking and over-manning going on, and also ask how Bechtel’s role is supervised. But while there’s a lot of talk about it, it’s reorganising the deckchairs really. The project rolls on.”
Headache or a crisis?
Holden led the slimming down, but Morgan denies he left because of opposition to this and says the restructure, due to finish in the spring, will be unaffected by Holden’s departure. Of any frustrations Holden may have had, he says: “There are no negative reasons for his departure. This project always had complications attached, but he not only knew what he was taking on, he was very good at it.”
When the person in charge of a project this size leaves unexpectedly, it inevitably attracts speculation. The man himself wasn’t available to talk to Building to explain it. Whether this major headache turns into a full-blown crisis depends on whether Crossrail is able to find someone of similar stature to fill the role, and how smoothly it deals with the transition. Certainly the job is nowhere near done.
Universally respected for his work on Crossrail, Holden has skilfully negotiated both its technical and political challenges, despite having no engineering training and not being overly blessed with charisma.
Trained as an accountant, he has won the respect of colleagues and partners by his ability to get on top of subjects since his move from London & Continental Railways (LCR). His skill over the past 12 months in turning the threat of funding cuts into a government agreement for a more realistic delivery schedule marks a skilled political operator. Rather than using bluster and personality to persuade, he has relied on intellect and analysis, as well as his record
Names in the frame?
Mark Bayley, chief executive, London & Continental Railways:
Worked as Holden’s deputy on the High Speed 1 project and already tipped for the job. There may be a feeling that he worked best as part of a team with Holden.
Andy Mitchell, programme director, Crossrail:
Holden’s number two at Crossrail, Mitchell is widely liked and respected, and would be a good public face for the project. Some feel he is not yet ready for the step up.
Simon Kirby, director of infrastructure investment, Network Rail:
Kirby has been a rising star at Network Rail since joining from the defence industry in 2003.
John Armitt, chair, Olympic Delivery Authority:
Respected for his job on the Olympics, and before that for turning round Costain and latterly, Network Rail. At 65, he may not want to return to frontline work.
Tim O’Toole, chief executive, First Group:
The former boss of Transport for London has lots of experience running major engineering programmes, but has only recently been appointed to his job at First Group.
What are the key priorities for the new man?
The first priority for 2011 is awarding the remaining tunnel contracts, Thames Tunnel construction and Connaught Tunnel refurbishment. Manufacture of the tunnel boring machines begins this year, while construction of the tunnel portals continues. Major decisions will have to be taken on the main tenders for all central London Crossrail stations, let this week, and on signalling systems for the trains.