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Contractors fear period of inertia before Higgins joins Network Rail

Senior industry figures fear the three-month wait for David Higgins to take up his new role as Network Rail chief executive could make the job even tougher.

Mr Higgins was appointed to the crucial rail role last week but will not be leaving his current position as chief executive of the Olympic Delivery Authority until February 2011.

Outgoing Network Rail chief executive Iain Coucher is due to leave the company at the end of October.

Among the challenges awaiting Mr Higgins are finding cost reductions in the wake of the comprehensive spending review, planning the new high speed rail network and continuing with Network Rail’s efficiency drive.

A month later, in March, Sir Roy McNulty will release his value-for-money study on the rail industry, which was commissioned by the previous government.

This is likely to pile more pressure on Mr Higgins as it is expected to highlight the rail infrastructure operator as an area for improvement.

May Gurney chief executive Philip Fellowes-Prynne told Construction News: “We need to keep investment and leadership in rail going and from that perspective it’s frustrating that the appointment is taking some time.”

He said it was important for chairman Rick Haythornthwaite and senior directors to ensure Network Rail continued its momentum until Mr Higgins’ arrival. Peter Henderson, Network Rail’s director for asset management, will act as interim chief executive.

Sources told CN they were worried that communications with the Office of Rail Regulation, and tender processes for work under Network Rail’s Control Period 5 investment period, could suffer as result of the leadership gap.

Contractors working in the rail sector are keen to see Mr Higgins make changes to the way Network Rail deals with them but there is
a degree of scepticism in the industry.

One contractor source said: “The problem for contractors is the people at the top [of Network Rail] say the right things but it doesn’t filter through lower down. It is a big ship and you’re not going to change it overnight.”

The source added that the nature of the Network Rail chief executive role was very different from that of the ODA.“Yes he’s got an excellent reputation and maybe with the help of the McNulty report he can try to bring in the innovation needed.

“[At the ODA] he was doing new build on a greenfield site but now he’s taking on an existing organisation running a day-in, day-out business.

“It’s going to be a difficult one for him. They are all very loyal to [former chief executive] Iain Coucher and everyone has a lot of respect for what he has done. David Higgins is going to have an uphill struggle as he’s very much the outsider.”

Mr Higgins said he could not have turned down the opportunity to run “one of the most important companies in the UK”.

He said: “My priority is to bring Network Rail and the industry closer so that together we can continue to improve service, efficiency and safety and add much-needed capacity to a railway network that is nearly full.”

It has been reported that Mr Higgins’ salary will be in excess of his current deal at the ODA but lower than his predecessor Iain Coucher’s salary of about £600,000 a year, which was the subject of much media coverage.

One source said the incoming chief executive’s pay was not necessarily a big concern to the industry.

“It’s a tough job and it needs top-drawer people. The fact that it’s paid more than the Prime Minister means there’s a problem with the Prime Minister’s wages.”