Jeremy Long, CEO of MTR’s European Business, is as busy as he’s ever been with the company. Franchise bids for Essex Thameside and Thameslink – notwithstanding the pause in the aftermath of the West Coast debacle – would have kept him busy enough. But Long also oversees the running of MTR’s London Overground joint venture with Deutsche Bahn, and MTR’s Metro concession in Stockholm. Not content with this, Long is also seeking further expansion: ‘We are now looking at other franchise and concession opportunities here in the UK and elsewhere in Europe.’
A new impetus for growth has also been provided from the MTR group board in Hong Kong. ‘This means we can now look at potential investmentled opportunities, if we see the chance to make a sensible commercial return through investing in railway assets – whether that is infrastructure, rolling stock or other businesses,’ Long explains.

The challenge

Having these kinds of opportunities to pursue is why Long initially chose to leave FirstGroup and join MTR. ‘The opportunity to build a business over here – backed by a very credible international operator that, in some respects is clearly outperforming the UK market – was a very interesting challenge,’ he says.
Long admits that he initially didn’t know much about MTR. ‘The more research I did, the more impressed I became about the quality of operation and the culture within the business.’ The fact that he’s still with the business nearly eight years later suggests he remains impressed.

Size is a major strength

MTR’s business is broad and growing. It is a large company by any standards, with a Hong Kong Stock Exchange listing and a market capitalisation of around £11bn. As well as its home base in the former UK territory, where the railways were built by British engineers, MTR now has operations in major Chinese cities such as Beijing, Shenzen and Hagzhou, Melbourne in Australia, as well as Stockholm and London Overground on Long’s patch.
It also has an international rail consulting business which, for example, recently completed a project supporting the introduction of new Chinese rolling stock on the Rio de Janeiro metro. And the corporation covers every aspect of the rail business, from train operation, to track maintenance, renewals and enhancements, and maintenance of rolling stock.
Long sees this as a major strength. ‘It means whatever the problem, we have a specialist team somewhere within MTR who can fix it.’
The post-McNulty world It also means that Long thinks MTR is well-placed to thrive in the post-McNulty world of alliances and partnerships.
‘In Hong Kong, MTR benefits from operating a completely integrated railway. It is able to look across the track, signalling infrastructure, rolling stock and operating aspects of the business and take decisions as to where to optimise its investment and where to focus in terms of achieving improved performance,’ says Long.
‘That is a benefit in terms of being able to see it as a holistic system and look at investments in whole-industry, wholelife terms.’ In the UK and Europe as a whole, vertical integration is firmly off the agenda, but Long is confident that alliances and partnerships can deliver similar benefits, with the right operators and infrastructure managers in place.
‘McNulty highlighted areas where neither side was going to have been able to achieve the same level of cost savings or efficiency working on a standalone basis,’ explains Long. ‘Above all, McNulty was encouraging the industry to find new ways of aligning, alliancing or incentivising the various parts of the industry to work more effectively together to bring about further cost savings. I completely agree with that, both in terms of improved operating performance and cost efficiency. There is more to be achieved through the industry aligning itself more successfully.’
Close relationship with Network Rail Long sees this alignment as key to what MTR offers, and has been putting these principles into practice via LOROL, MTR’s joint venture with Deutsche Bahn, which holds TfL’s London Overground concession.
‘We would simply not have been able to drive up LOROL’s overall PPM performance to where it is today without a long-standing and very close de-facto alliance with Network Rail.’
And Long praises Network Rail’s approach under David Higgins, saying ‘Network Rail has been an improving organisation over a long period of time now and the culture and approach of the current top management team are very much welcomed.’
‘We have worked with Network Rail over a succession of performance improvement initiatives and we work very closely with them day in and day out to sustain the level of performance that we see from LOROL right now.’

Olympic performance

That level of performance is consistently up there with the best in the country, and during the Olympics London Overground achieved PPM of more than 98 per cent, despite carrying more passengers on more trains than ever before.
‘The level of contingency planning carried out by the LOROL team over many months in conjunction with Network Rail meant that during the Olympic period we were able to operate very successfully at levels of peak traffic we had never encountered before,’ says Long. ‘We were running at about 25 per cent above our normal loadings over an extended period during the Olympic Games.’

Working with TfL

The working relationship with TfL has also been key. ‘We have a very good relationship with TfL at all levels,’ says Long. ‘We have worked very closely since winning the concession in delivering a turnaround in the Overground business in almost every respect: improved operating performance, improved customer service, improved quality of the product – backed by TfL’s investment in the system.’
This included employing some of MTR’s wider range of skills. ‘TfL procured the new fleet of trains from Bombardier, the Class 378s, for London Overground, and awarded the long-term fleet maintenance contract to Bombardier. As London Overground, however, we were then responsible for overseeing their introduction. Subsequently we have worked very closely with Bombardier to secure the improving performance of those trains.’
MTR also provided direct support as TfL brought the East London Line into the London Overground network. ‘At various stages of the delivery of the project,’ Long explains ‘MTR brought project executives over to assist TfL in the delivery of the overall programme itself. That proved helpful to TfL in providing a different aspect of MTR’s expertise over and above the operating responsibilities we had within the LOROL concession.’

Jeremy Long

Looking forward

These are all experiences that Long wants to put to good use on up-coming franchises and concessions such as Thameslink and Crossrail, where in both cases major infrastructure programmes will be completed while new fleets of trains are introduced, and all while an operator is expected to deliver ever higher levels of performance.
TfL will let Crossrail as another concession and Long seems keen to work with them again saying, ‘I am sure we will be a keen bidder for Crossrail in due course.’ And while he is clear that no final decision will be made by MTR until it has seen what requirements TfL is making of its concession holder, Long believes that, ‘TfL will be looking for Crossrail to be a truly worldclass railway operation.’
Mergers on the cards
Long will not talk about the Thameslink franchise as MTR is a shortlisted bidder in the ongoing procurement process (albeit that the process was suspended at the time of this interview). However, the next Thameslink franchisee will have a merger to deal with, when the current franchise operation is joined with most of what is currently Southern’s route, and some of the existing Southeastern franchise.
Asked about such mergers, Long explains that a few years ago MTR merged with the former operations of KCRC – another long established railway business in Hong Kong. Over two or three years of planning, MTR and KCRC management put together what became a very successful merger of the two operations in 2007. The combined business doubled in size and continues to perform at very high levels.

Staff and culture change

There were two key ways in which MTR achieved this, according to Long. The first was preparation, which ensured that the transformation that seemed to customers to have happened overnight was meticulously planned.
The second was that MTR worked tirelessly to engage with staff to achieve a common culture.
Long sees this staff engagement as central to MTR’s commitment to driving continuous improvement. ‘In companies that have successfully adopted continuous improvement processes, what you see is engagement of staff throughout the organisation, so that they themselves can participate directly in improving the business.
‘That is certainly the case in MTR, where we have a programme of what we call work improvement teams throughout the organisation. At any point in time there will be teams working to solve particular current business issues and coming forward with solutions from their own knowledge and crossteam expertise. It is one of the ways in which everybody can participate in making a better business and focusing on the long-term improvement for the customer.’

Snowed under

Sometimes the problems faced are posed by the elements. Despite what much of the UK media seems to think, this country is not the only one whose rail systems struggle with snow.
On MTR’s Stockholm Metro system, which is overseen by Long, similar challenges have been faced. Long says: ‘We have traded through two very difficult winters with exceptional levels of snow in the city and succeeded in sustaining the service during times when, previously, the network would have been seriously disrupted.’
Again, Long puts this success down to working closely with Stockholm’s equivalent of Network Rail.
‘We put a lot of effort into working with the infrastructure maintenance contractor over the last two years to improve the level of preparedness,’ says Long. ‘That has led to us being able to operate through periods when previously the system would have seen quite serious disruption.’

Lessons for London

Like much of the Thameslink, Southern, Southeastern and South West networks in the UK, Stockholm Metro operates a third rail system that makes it vulnerable to snow which Long says can be ‘quite abrupt – as much as a metre can fall in quite a short period of time’.
Parts of the London Overground network are also third rail systems, which makes it vulnerable ‘both in relation to ice, which is more prevalent, but also for some of the snow that even London has faced in the last two or three years’, says Long.
‘We have planned – with London Overground, Network Rail and its contractors – a high level of overnight preparation of the railhead, both in winter and in autumn, to ensure that the deterioration in our performance that we see is absolutely minimised. Again, LOROL’s overall performance at times of serious weather disruption has been less seriously affected than some other routes.’

MTR train in Hong Kong

Working with the wider business

Long says that none of the success that MTR has achieved in the UK and Europe would have been possible without the strong backing of MTR’s group board in Hong Kong. And Long now has a global CEO who knows the UK market very well. New Yorker Jay Walder, who joined MTR just over a year ago, had been TfL’s managing director for finance and planning for over six years during Ken Livingstone’s London Mayoralty.
Long says ‘It has been great working with Jay. It is good to have a CEO in Hong Kong who obviously has a real familiarity not only with the UK market but with the wider European market.’
With this strong backing from the board, Long is well set to lead MTR’s bids for the raft of franchises, concessions and other opportunities coming up in the UK and European rail markets in the next few years.
He’s certainly not going to get any less busy – but you suspect Long wouldn’t have it any other way.