Tube Lines in Negotiations With O’Toole Over Vacant Chief Executive Post

6 comments

The Financial Times posted an interesting story over the weekend linking Tim O’Toole, London Underground’s former Managing Director, to the Chief Executive position at Tube Lines vacated by Dean Finch last month.

The FT claimed that Tube Lines had entered negotiations with O’Toole over the vacant post, although this was a situation that David Begg, Tube Lines’ Chairman refused to confirm:

I haven’t offered Tim O’Toole a contract, so I cannot say whether or not Tim O’Toole is coming

Mr O’Toole himself was similarly uncontactable.

BBC London, however, are now indicating that they have received confirmation from Tube Lines that contract negotiations are indeed underway between the two parties over the Chief Executive position.

Should O’Toole take the post, then it would be an extremely interesting appointment.

O’Toole headed London Underground for six years until returning to the States last year. A US freightman before being appointment to LUL’s highest role in 2003, O’Toole earned a strong reputation (and a CBE) for his effective management during his tenure at the company, and his departure was strongly felt. As Christian Wolmar wrote at the time:

He has been an undoubted success in his six years at the helm, not only in dealing with such crises as the 7/7 attacks and the collapse of Metronet, but also in winning over the staff to ensure that industrial relations have been at their best for years as well as the public who have been impressed with the American’s quiet but firm demeanour.

The appointment would be interesting in no small part due to fact that O’Toole was, as the quote above suggests, in post both during the genesis of the PPP contracts and during the collapse of Metronet.

At the time of Metronet’s collapse, O’Toole was vocal in his criticism of the firm and the way they had operated. Though it would be easy to generalise him as an out-and-out opponent of the PPP frameworks themselves, however, it is probably be best not to do so. Whilst he has certainly been critical of the PPP at times, at the time of Metronet’s collapse it was their obvious failings as a company that tended to earn his ire, rather than the contractual terms they had been granted.

Indeed the closer one looks at the appointment the more it would appear to make sense – and the easier it becomes to see why he apparently sits at the head of Tube Lines list of candidates. O’Toole has the knowledge of both the complex PPP Frameworks and LUL itself to hit the ground running, and the respect with which he is still held within TfL and LUL themselves would be an enormous asset in the much-needed efforts to restore the shattered relationship Tube Lines has with both parties.

Rather fortuitously, O’Toole also vacated his position in the greater part before the current RP2 costing battle kicked off. Indeed when the PPP Arbiter’s initial guidance was published towards the end of 2008 suggesting a potential £1bn shortfall, Toole’s comments were brutally straight forward – the work must happen, and any shortfall should be funded by the Government:

We do not have the option of scaling back the works to offset this expected demand [any excess cost] because the Tube will become less reliable and its capacity will shrink at a time of growing demand, and, in any event, the PPP contract produces an increase in operating charges as a result of any reduction in capital spending, thereby frustrating attempts to cut funding demands.

The difference in the costs budgeted for by TfL and those produced by the Arbiter are in large part in the inscrutable areas of so-called central costs, differential inflation and risk.

The premiums to be paid in these areas are a result of the PPP structure.

Any funding required above TfL’s budget should be met by continuing support by Government, who imposed this PPP structure on the Tube and Londoners.

Whether that view would survive his appointment to Tube Lines’ top position, of course, is open to question. If it did, then it would certainly align closely with an attitude increasingly being taken by both TfL and the Mayor.

Whatever happens, should O’Toole come on board at Tube Lines then its difficult to see how it could be anything other than a postive move – and one that would likely have a major impact on the current unsatisfactory situation.

Indeed, whether O’Toole arrives on the scene or not, the mere fact that he has been approached may suggest one key thing – that even with the RP1 contract break-point fast approaching, Bechtel and Ferrovial (the companies behind the Tube Lines joint venture) may not be quite ready to step away from London Transport just yet.

Written by John Bull
John Bull is the Editor of London Reconnections. A transport journalist and historian, his writing often focuses on the political or strategic challenges facing London's transport network and beyond.