by James Meek
As an extreme measure to bring the final bill down, the rail industry had agreed to shut the entire stretch of railway we were standing on, from Crewe to Cheadle Hulme, for four months, forcing thousands of travellers on the then First North Western railways to use coaches while 600 orange-suited men and women worked on the line twenty-four hours a day, seven days a week. Without such radical steps, said Tom McCarthy, the Californian who led the Bechtel west coast team, the project could have ended up costing £13 billion.
It could have cost much, much more. The project was a stripped-down version of a fantasy railway which, in 1997, Railtrack locked itself into a brutal contract with Richard Branson’s Virgin Trains to build. I sat one day with Stuart Baker, the man brought in by the Strategic Rail Authority in 2002 to survey the wreckage of Railtrack’s west coast plans, and read out to him the sequence of growing price tags: £1.5 billion in 1996, £5.8 billion in 1999, £7.5 billion in 2001 …
‘None of those numbers delivers the contract,’ he said. ‘You could talk about numbers six or eight times that. It is into 30 to 40 billion if you were actually to create the infrastructure necessary to fulfil [Railtrack’s original] obligations.’
At Goostrey, I encouraged the Americans to talk about why the project turned out to be so much more expensive than its creators thought. Bob Brady, a Texan from Houston who was managing the reconstruction of that part of the route, began to answer: ‘I think part of the issue was the politics when it was privatised – ’
McCarthy interrupted him. ‘Don’t go there,’ he said.
And Brady didn’t. But he was right, which is why McCarthy didn’t want him to say any more. The problem with the west coast project was not that it was going to cost £9 billion, but that the original bosses of Railtrack thought it could be modernised at a fraction of the price, and sold this ideology-driven delusion to the public and the City.
Friday, 23 December 1994 dawned foggy and almost freezing in central London. The papers reported on Yeltsin bombing Chechnya, on new developments in the Guinness scandal, and on fresh Labour attacks against the millions of pounds made by directors of recently privatised utilities. On the fifth floor of an office building in Hanover Square, London, a group of fifteen consultants sat in a room carrying out a laborious task. They were writing numbers by hand, in red ink, in the top right-hand corner of a secret 182-page report.
The red numbers were a device to stop the report being leaked, as so many documents were in the course of rail privatisation, the most controversial of all the Conservatives’ state sell-offs. That spring, Railtrack, a new organisation, had taken over state-owned British Rail’s responsibility for running and maintaining tracks, bridges, signals and tunnels. Railtrack was due to be floated on the stock market. It was essential that it convince the public and the City that it could finance and organise the modernisation of the west coast line – something British Rail (BR) had never been given the money to do – and the report was going to tell Railtrack how it should do it.
Five years later, when the consequences of the report’s recommendations became clear but the report itself had been forgotten by the media, a subsequent generation of Railtrack bosses tried to blame it all on BR. In fact, BR had nothing to do with it. Railtrack was determined to prove that it didn’t need BR’s expertise, so it commissioned a consortium of consultancy firms to do the job.
That Friday, two days before Christmas, the consultants were in festive mood. They’d been working on the report since March and as soon as they had finished with the red numbers, off it would go to the government and Railtrack, the job would be done, and the holidays would begin. ‘We had to get it finished by noon, and we finished by eleven,’ one of the consultants recalled. ‘I think we all went down to the pub afterwards – the kind of jolly, end-of-project thing that happens.’
On the face of it, the consultants had every reason to celebrate. They had approached a gigantic problem, and come up with an elegant solution.
For a culture that has been under constant attack from the public and the media for almost two centuries, the rail industry has a surprising love of misleading jargon. The west coast main line, usually known in the business as the WCML, is a case in point. It doesn’t run along the west coast, and it isn’t a line. It’s a 690-mile network of routes between London and Glasgow, connecting them to Liverpool, Manchester, Birmingham and scores of other large towns in the West Midlands and north-west of England.
It is almost the oldest inter-city railway in the world. It was built higgledy-piggledy over three decades, starting in 1833, by entrepreneurs and hard-drinking, red-waistcoated navigators who, if they died on the job, were sometimes buried where they fell. Its narrow tunnels, lines squeezed together, tight curves and eccentric kinks reflect not just the geography of the land but the speed of contemporary trains – 40 mph max – and the reluctance of powerful landowners to have clanking, smoky iron horses hauling the proletariat across their estates. Robert Stephenson, son of George, who built the London-to-Birmingham stretch, had to make some of his measurements secretly, by night, to avoid being run off the squireocracy’s property.
Between 1833 and 1994 the line was modernised, of course, but never rebuilt. Anyone who has lived in a nineteenth-century house will be familiar with the problem. The arcane wiring when electricity came along, the subsequent clumsy rewiring; the cheap flat conversion in the 1960s; the constant saga of patch and mend from occupants who never have the money or vision to remake the whole thing from scratch – all this, and more, was paralleled on the WCML on an enormous scale. When the consultants came in, the WCML had been starved of investment by governments for some twenty years. The only significant reconstruction was in the 1960s, when the railway was modified to take electric trains. Repairs and the skills of Georgian and Victorian engineers enabled train speeds to increase until the mid-1980s. Then the network began to deteriorate quickly.
The greatest problem was the signalling. It had to be replaced, but to remake that system, with its thousands of miles of cables, coloured lights on poles and elderly signal boxes, would be staggeringly expensive. A 1992 document, the Hesketh report, classified at the time but later slipped without publicity into the House of Commons library, recounts in bald language the horrific state of WCML signal boxes, on which the safety of passengers depend. They read like despatches from a war zone. Stockport signal box 1 was ‘installed 1896. Roof of relay room lets in rain. Cable route heavily damaged … very few spares. Signal structures have severe corrosion. Power supplies are suspect.’ Brewery Sidings: ‘Installed 1894 … severe structural problems … incapable of modification … signal structures have severe corrosion and access by staff is by special arrangement.’ Miles Platting: ‘Installed 1890 … box and relay room have serious structural damage with propping by the civil engineer to prevent collapse.’
How could Railtrack do it? How could they do what BR had not done and rebuild this tottering railway? The consultants came up with a remarkable scheme which would, besides modernising the WCML without costing the Treasury a penny, enable trains to whizz between London and Glasgow at the unprecedented – for Britain – speed of 140 mph, and make the west coast line the envy of the railway world.
A new idea was being discussed in rail circles in the 1990s. It was called ‘moving block’, and it was supposed to do away with conventional signals for ever. It was based on the technology used for mobile phones. Normally, trains run on a fixed-block system. A line is divided into stretches called blocks, with signals controlling the entry and exit to each block. If a block has a train in it, the signals prevent another train entering that block and crashing into it. Moving block abandons conventional signals in favour of computers, track-mounted radio beacons and a cellular radio network. With these, train drivers always know where they are in relation to other trains. They still have a protective block of space around them, but it moves along with the train, and shrinks or grows according to how fast it and the trains in front and behind are
going.
Once Railtrack’s consultants fed moving block into the equation, the miraculous happened. The numbers made sense. They wouldn’t have to remake the signals; they would simply demolish them, and replace them with a few mobile-phone masts and black boxes in existing train cabs, which would be far cheaper to install and maintain. Thanks to moving block, they would be able to squeeze more trains onto the line. The trains could go faster, which would not only justify charging passengers higher fares, but would mean the train operators could run more services with fewer trains. As the final cherry on the cake, the cost of upgrading the route to take 140 mph expresses could be defrayed from the extra profits the express operators would make.
There was only one problem with moving block, but it was a crucial one: moving block for main-line railways did not exist. Even now, almost twenty years later, there is not a single main-line railway anywhere in the world, no matter how sophisticated, that uses moving block. It is used only on a number of urban transit systems, such as the Docklands Light Railway and the Shanghai metro, and the great majority of these had moving block* installed long after the WCML upgrade was due to be finished. For inter-city express trains it remains where it was, on the drawing board. The consultants did not allow this detail to stop them, and nor did Railtrack.
‘When I heard about it from outside, I thought: “Wow, they must have had some amazing breakthrough which means this is now a proven bit of kit.” And it wasn’t,’ Chris Green, then head of Virgin Trains, told me. ‘It was a wish list. To put that wish list on Europe’s third busiest railway really was outrageous.’
Of the four teams of consultants that prepared the feasibility study, Booz Allen Hamilton was responsible for coming up with the recommended signalling system. No one from the company would comment for this article, but one of the consultants involved in 1994 did talk. Of the eventual core team of eight consultants, only two had experience of British main-line railways, one at a very junior level. Four of them were American or normally based in the US. Not one had expertise in moving-block signalling on railways like the WCML; most of the experimental work on moving block was being done in mainland Europe.
The consultant asked for his real name not to be used. I’ve called him Arthur. He said of some of his colleagues: ‘My personal view was … they hadn’t got the knowledge to try and do this in any sensible way. Coming from an intensely professional railway background, I was appalled by this.’
Not knowing what other railways of the world were up to, the consultants did a write-round. ‘We did a trawl,’ said Arthur. ‘We wrote to manufacturers and asked them for information … we asked the Japanese what they’d got [in terms of moving block] and they said: “Well, nothing, really.” Which amazed us.’ Indeed, this would, a lay person would assume, have given the consultants pause for thought. Neither the Japanese, with their 160 mph bullet trains, nor the French, with their 160 mph TGVs, used moving block in 1994: they still don’t.
Yet despite this lack of knowledge, the fact that no railway in the world was using the system, and the fact that the equipment needed wasn’t being made by any manufacturer, the Booz Allen team ended up recommending moving block. Why? Arthur hinted that the remit was not to find the most practical solution and ascertain the cost, but to find the solution that would make privatisation financially possible. The cost of conventional signalling, had they been told it, would have frightened investors off and halted privatisation in its tracks.
‘The thing that everybody always theorises is, why did you recommend such a highfalutin-type system for the WCML? And that’s a fair question,’ said Arthur. ‘But it’s not a fair question when you actually look at what the remit was. The remit was to come up with the most cost-effective solution.’
The Booz Allen consultants came to another conclusion which, in retrospect, seems extraordinary. Even though they knew what the privatised railways would look like, with Railtrack owning the infrastructure, a horde of private train operators running services, and dozens of other private outfits all taking a cut and all trying not to step on each other’s contracts, they based their estimates of how much the WCML modernisation would cost on British Rail history – the bargain-basement modernisation of the east coast main line, and the development of a new type of conventional signalling twenty years earlier. It was as if a western oil company based its cost forecasts in Putin’s Russia on the pricing practices of the Soviet Union.
‘What I hadn’t understood,’ admitted Arthur, ‘was that the restructuring of the railway was going to bring a complexity beyond my wildest dreams.’ Nor could the consultants have anticipated that the bosses of Railtrack would go on to cherry-pick their conclusions.
Railtrack was led to privatisation by two men, its chief executive, John Edmonds, and its chairman, the late Robert Horton. Edmonds was a former senior British Rail executive, Horton the former chairman of BP. Yet it was Edmonds, the former public-sector boss, who was the private-sector firebrand. Far from being loyal to BR’s way of doing things, his experience on the state railways had inspired in him a scepticism towards in-house engineers and safety experts bordering on contempt. They were, he considered, overcautious, conservative, stuck in the mud. It was this that led him, at Railtrack, to shed its nucleus of in-house expertise, leaving the company unable to understand what its myriad specialist contractors were up to.
Edmonds declined to be quoted for this chapter. A senior rail manager said of him: ‘He was the one who got rid of operations managers and engineers because he didn’t believe in them. He thought it could all be contracted out and commercialised. He had a desire to break the mould and change. He was always opposed to the traditional railway. He believed there was a golden panacea in the private world where you just free people up and new technology comes in and the markets come in and it all happens. The railway doesn’t work like that. You’re not manufacturing baked beans.’
Like Edmonds, Horton was an advocate of privatising Railtrack. But although Horton was happy to play the role of swashbuckling private-enterprise shaker-upper, he was no entrepreneurial start-up king. Though he’d studied engineering in the 1950s he was no engineering wizard, either. He was, essentially, a highly paid private bureaucrat who made his reputation in the offices of a post-imperial semi-state oil company. He did not make BP; BP made him. It was already a vast, sprawling corporation when he arrived in 1957, and it was still a vast, sprawling corporation when he was sacked in 1992, no matter how much he changed it. He did, at least, know about the oil business. But he didn’t know much about trains.
‘He wasn’t close enough to the railway to know what was going wrong,’ said one rail industry source. ‘So he was great at privatising, great with the City, good at getting private investment into industry. He didn’t understand that he’d lost all his key operators, lost all his key engineers, and was chasing technology that wouldn’t work.’ Horton, who died in 2011, also declined to be interviewed. In a brief email, he told me: ‘I think it is important to understand that the scope of the project changed enormously over time as did the decisions on the technology to be used.’
In 1994, Edmonds, Horton and the latest in a blurry succession of Conservative transport secretaries, Brian Mawhinney, all wanted to hear from the consultants that the WCML could be modernised with privately raised money, by a private railway company. Yet there was still an opportunity for someone to persuade them that the risk they were taking was unacceptably high.
The key expert standing between Railtrack and the catastrophic decision to go for moving block was Rod Muttram, the firm’s new director of electrical engineering. But he too knew little about the railways: he’d been headhunted from the arms industry, where he’d been involved in developing weapons systems, including a new type of artillery rocket. He believed moving block could work, in theory. As to whether it could work in practice, on such a complex rail network, he was dependent on what the consultants told him. (Muttram declined to make a public statement to me.)
Yet British Rail still existed in 1994 and 1995, and its board thought the consultants’ ideas were far-fetched. John Welsby, then chairman of BR, told me: ‘I did have grave concerns about the attempt to integrate a type of technology that had no testing in real, active life in what, in fact, was the most complex railway in the country.’
Welsby wasn’t exaggerating his wisdom after the event. A senior Railtrack figure, one of the key men liaising between Railtrack and the consultants, recalled: ‘There were huge rows at the time with the British Rail board, who were completely unsupportive of the project. John Welsby, then chairman of BR, was the most vociferous opponent. He said [moving block] could never be done on a railway like this.’
Welsby and his BR colleagues were unable to get the message through to their private sector successors. ‘You have to remember that we were all, at that stage, unbelievably busy,’ he said. ‘All my lads had about three jobs. Firstly, they were running a railway. Secondly, they were breaking it up for sale. Thirdly, they were often preparing a management buyout at the same time. People were working seven-day weeks, twelve-hour days. Our advice was passed across but then it was up to Railtrack to take that advice or not, as they wished … of course they would have resented it anyway. The climate has to be remembered: we were big, bad BR, being broken up and done away with, because we were anathema to the government, so the new order was not necessarily going to look very favourably on us.’
Another warning came almost as soon as the consultants handed in their report. It came from Europe. The consultants’ report – a copy of which I obtained through the Freedom of Information Act – makes little mention of the European dimension. None of the consultants was from mainland Europe. Yet it was clear from speaking to Arthur that they’d assumed other European railways were preparing to introduce the new technology as well, and that Britain, relying heavily on European research, would merely be the first to apply it.
