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King of the road

Atkins | 10 Dec 2007 | Comments

What’s it like being responsible for a country’s highways? Archie Robertson, chief executive of the UK’s Highways Agency – one of Atkins’ largest clients – discusses negotiating contracts, going green and his low-emission MG.

The UK public sector is under ever-increasing scrutiny these days: how’s the Highways Agency doing?

The organisation is really picking up momentum and finding new ways to help its customers with their journey. We are in the customer service business and our thinking is increasingly orientated that way.

When I look at the bigger picture, I see not just the Agency, but the whole supply chain that makes it work. The Agency is part of a bigger picture after all – we’re responsible for the UK’s trunk road network, for example, and it takes 30,000 people to develop and maintain it, most of whom are contracted out. This customer service attitude is beginning to have an impact on the whole supply chain.

We’re also being tested pretty vigorously in this era of climate change – flooding, heavy rain, unexpected snow. We’re equally challenged by very hot weather or when there is an accident due to these weather conditions – we have to help those people as well. Our capability is increasing, but so are our challenges.

How else has the relationship with your supply partners changed in the past few years?

Over the past 12 to 15 years, we have moved from a confrontational style of negotiation towards recognition of shared values and benefits, and a better understanding of every party’s needs. There are huge amounts of money at stake and getting the right commercial relationship is important, but I think there are ways of dealing with how you squeeze the last pound of margin out of it. Two decades ago, we would go out to tender and say, “This is the road we want built – whoever bids the lowest price will get the business”. Then everyone bid the price down and when they received the contract, they sought to recover additional cost and margin at every opportunity. There were always disputes and some of the disputes from 20 years ago have only been settled in the last few years.

The UK government never knew what it was paying for a road until a decade later. A huge amount of energy would have gone into arguing what those claims were.

How have you improved this system?

Now, we procure based on the qualities our partners offer. We agree what margin a partner will have when he comes into the business. This way, there is nothing in it for him on the margin, though there might be on the risk. We then go into the project, where all of the costing is open book. Almost every major project we do now is subject to that arrangement.

We are still looking at this process – it is relatively new. Because there are cost pressures on the industry, I am planning for the agency to take a more commercial stance in the way that it places its contracts.

Meaning you’ll be more aggressive on costs?

Yes. We’re moving into a motorway-widening phase, having done lots of junctions and bypasses, and I regard widening as part of a production activity. You take a motorway, you widen it and re-open it. We look at the cost per mile, and I try to think in real terms on behalf of the taxpayer.

As people come up with better ways to construct roads, that cost should come down in the same way the cost of the vehicle that drives up and down those roads has come down.

The new M6 in Manchester is said to cost £1,000 per inch. Would you call this good value?

I have no idea whether that is a useful measurement, as I have no intention of buying an inch of motorway. But it does cost about £22m a mile to widen a motorway, so we have some benchmarking data and we’re developing more as part of a new project directory. This will look at overseas practices and their benchmarks.

The most difficult thing in benchmarking is the cost of land, which is vastly different in the UK than elsewhere. Equally, finding someone else doing what we’re doing is hard. We are widening roads, whereas the Spanish, Irish and Americans are building new motorways. The Dutch are placing emphasis on road pricing. A “road” isn’t a “road” in the same way everywhere.

Ultimately, the UK government has a strategy with three prongs to it: increase capacity, make the existing network work a lot harder and explore demand management such as road pricing. It has earmarked the money to do that and we proceed at the pace that the money is available.

The green agenda dominates your reports right now. Are you personally a believer in climate change as a consequence of human action?

I am. There is no doubt about it. In my role here – and in my previous role at the Environment Agency – I have seen lots of data that I consider as evidence that things are changing much more quickly now and in less predictable fashions than could be predicted with historical patterns of natural climate change.

The UK government accepts there is an issue with climate change and this is clearly the case, so I am fairly well aligned from that point of view.

As for the here and now – we are facing great challenges as a consequence of climate change, for which we have no precedent in the Highways Agency network. We have to make sure we are ready for these challenges in future because we are responsible for the safety of our travellers, and we have to make sure our network works because therein lies the means for wealth creation in the country.

What impact can your organisation have on global climate change?

Very good question. We can change our own activities. We can have an impact on our customer activities – though I wouldn’t suggest that motorists don’t have to do anything because the Highways Agency will do it for them.

We can reduce emissions by keeping traffic flowing smoothly and we’re looking at other activities and ways of preserving habitat beside roads. We are also reducing our own emissions, whether carbon or particulates and other pollutants.

For example, on big projects we work very hard to minimise the amount of material that we have to move into the site. Instead we use indigenous materials. We’re prepared to use recycled materials wherever we can, particularly in the use of ash from incinerators or from power generators as a base material for our roads.

Is a technology-based road pricing scheme inevitable now that both Labour and the Conservatives are for it?

I don’t know. As a network operator facing significant parts of the network that are under stress, with policy that is not to build but to respond to and manage demand, then we do need to explore congestion pricing if we are to avoid more serious traffic jams on parts of our network over the next few years. However, it is also worth saying that congestion is very specific to certain parts of the network and at certain times of day, so a universal pricing system may not be the most appropriate approach to take.

Are you comfortable with the idea of a “black box” that pin-points the location of every car?

Personally, I have no difficulty with it. The debate so far has been, “Do you want congestion pricing or not?”, whereas the debate we need is, “Do you want to have congestion pricing or do you want to be gridlocked and stuck in a traffic jam for hours?” That’s the real choice.

When people are aware of the consequences of not having congestion pricing, then they can get into the more sophisticated debate about what is the best way to effect congestion pricing. But I don’t really have a strong view on which technology is better at the moment.

What about libertarian concerns?

Any tracking would need to be done in way that is fair and reasonable, just as is the case with the people who collect tax or store information for a driving license.

Recognising that information about me might become available to others if I choose to undertake an activity means I’ve got the choice whether or not to undertake that activity. That is where I can be libertarian about it.

What car do you drive?

I drive very little! When I do, I have a 1967 MG C. From a business point of view, I don’t think that car driving is a productive exercise. If I go by train, I can do something else during my journey. I live in Hertfordshire and commute into London by rail. If I am travelling to other parts of the network, I’ll take the train.

The MG is great, actually. It produces hardly any emissions… because I don’t use it. It is also environmentally friendly because it’s been recycled at least twice. It has a lot of re-used material in it.

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