Looking to the future: Alstom could one day supply trains to HS2, says Terence Watson
On the eighth floor of an office block in London’s Holborn, it is, perhaps, easy to imagine one is master of all one surveys: the London Eye, the Houses of Parliament, the Thames curving away towards the south, lost in sun and hazy smog on this early spring day.
This is the location of French engineering giant Alstom’s headquarters over here, and Terence Watson, president of the company’s UK division, is certainly intent on gobbling up as much business as possible in this country. The company has reason to believe it could significantly grow its British workforce of more than 6,000 in the next decade.
Even an exit from Europe, unlikely as that might seem, could not dampen Alstom’s enthusiasm for all things British, he believes. “Ten years ago the impression might not have been as favourable,” he says. “But in recent times we’ve come to view Britain as a key export market. It is strategic, because many parts of Europe are depressed economically.”
A mechanical engineer by training and a veteran of the rail industry, Watson, who comes from Manchester, has worked for Alstom since 1996. He began his career with Renold in Preston, Lancashire, and moved on to Alstom's traction business. He has always had corporate roles, he says. Alstom sponsored his MBA. He also studied at the Insead business school in Fontainebleau, France, and he speaks fluent French. “The company has done the right thing in terms of my training. It shows its internationalism.” Watson is also well-travelled, having worked in Korea, Japan and the US – where his projects included light rail schemes, such as the New Jersey transit system.
Today, in Britain, Alstom is involved – with partners Babcock and Costain – in the national rail electrification programme, which includes upgrades to the Great Western Main Line and Midland Main Line, as well as supplying trains to numerous programmes. About half the rolling stock used on London Underground was made by Alstom, and the company has been involved in both rolling stock and infrastructure projects on the Jubilee, Northern and Piccadilly lines. It is also charged with fitting out and commissioning the Crossrail tunnels under construction, and provides maintenance services to the tube’s Northern line rolling stock.
The Crossrail tunnels are being fitted out as part of the ATC joint venture, comprising Alstom, TSO and Costain, in a contract worth more than ¤350 million – one of the largest that Crossrail intends to award. The Alstom-led joint venture will fit out the 21km of twin tunnels that will stretch under London with the track and power equipment necessary for Crossrail trains to operate from 2018.
ATC will install more than 40km of track, together with rigid overhead conductors – a system that is being used for the first time in the UK to power heavy mainline trains through tunnels. The Crossrail tunnel fit-out works will also require more than 50,000m3 of concrete delivered by a ‘concrete train’, as well as the installation of 48 ventilation fans, 40km of walkways, 66 drainage pumps, 40km of fire mains, and lighting throughout the entire length. The fit-out works will be carried out within the entire tunnelled section of the Crossrail route, between the Royal Oak, Pudding Mill Lane and Plumstead portals.
The French company will not, however, supply trains for the project. That contract has gone instead to Derby’s Bombardier – a crowd-pleasing decision by Transport for London (TfL), given the furore over the decision not to award it the contract to supply new trains to Thameslink, work that went to fierce rival Siemens. In terms of Crossrail, Watson says it was prudent for Alstom not to get involved in the politics of the rolling stock deal. “We made the right decision in keeping away from Bombardier and the ‘made in Britain’ question,” he says. “All of that was not an issue for us, and we took what I view as the biggest and most sophisticated contract – which was integrating the Crossrail tunnel.”
The company had to be single-minded in not going for the rolling stock contract but bidding instead for infrastructure projects, and that involved challenging perceptions, he says. “Alstom was formerly looked on as a train-builder. That wasn’t my strategy, and when I looked at what we had in the market, and the areas that were growing, predominantly it wasn’t rolling stock – it was other things.
“We decided to go into infrastructure, and that has paid dividends. And we realised that if we wanted to win big infrastructure projects it would reduce the the chances of winning the train contracts. We had to make a hard-nosed decision to pick one horse. It was tough, because intuitively the company would have said, ‘let’s bid for the Crossrail rolling stock’.”
Hinkley Point: Alstom is preferred supplier of steam turbines for the planned reactor
As well as transport, in the UK, Alstom is also involved in the development of the electricity grid, the construction of fossil-fuel fired power stations and grid connections to renewable generation capacity, and the manufacture and supply of turbines for new nuclear power stations. It is the preferred bidder to supply its Arabelle steam turbines to the new nuclear power station at Hinkley Point C, which is being developed by fellow French giants EDF and Areva.
The company is eyeing further nuclear work. “We won’t want to stop there,” says Watson. He confirms that Alstom is talking to other utilities and consortia in the country looking to develop new nuclear power capacity. The Arabelle turbines are being installed at Flamanville, Normandy, where EDF and Areva are building a new EPR nuclear reactor.
How rigorous was the bidding process to employ the same design at Hinkley Point C? “It was healthily exhausting. People might think that some sort of deal was done because we’re French and EDF is French – that wasn’t the case. We weren’t able to exploit or copy the agreement we have at Flamanville. We’ve ended up with an agreement with EDF that has been robustly negotiated and that has been challenging,” says Watson.
Is he frustrated by the glacial progress of nuclear new-build in the UK following Japan’s Fukushima disaster? “No. We might have supposed there would be more in the pipeline. Delivering one or two turbines and then waiting for the next order is inefficient, because you have starting costs again. We are waiting for Europe to sanction it [new-build] now, but then I believe it will move at a pace,” he says.
The European Commission announced at the end of last year that it was probing the ‘strike price’ that EDF agreed with the government for Hinkley Point C, which guarantees the utility a certain level of revenue once the reactor is up and running. The commission, in theory, could rule that it breaches competition rules, having already endured a tortuous negotiation process.
“Long-term, estimating what should be an appropriate price is hard, and there are detractors who say this strike price is too high. I don’t think so. We are encouraged. But every time there is a contentious project, the European response is robust,” says Watson.
The latest Arabelle steam turbine is a 100 metre long, 75inch diameter (190.5cm) single-shaft product, said to be the only one of its type in the world. The turbines channel steam through high-pressure, intermediate-pressure and low-pressure sections. “The independent architecture of our low-pressure sections means that the vacuum forces onto outer casings are not transmitted to the turbine’s concrete foundation, and that it can be precisely and stably centred,” says Alstom. Watson adds: “It means your turbine has a good chance of long-term survivability because there are lower stresses. We’ve developed this technology over years, and are confident in it being deployed all over the world.”
The technology that should end up helping to generate electricity in Hinkley Point C will be manufactured in the nuclear and thermal power plant centre in Belfort, France. But the balance of plant, including the generator and generator house, will be supplied from both the UK and overseas. Perhaps one-third of the value of the turbine, housing and its installation will go to British companies.
In the future, despite its focus on new rail infrastructure in Britain, the company may also supply rolling stock to the High Speed Two (HS2) scheme – assuming it is built as planned. The company’s automotrice à grande vitesse (AGV) high-speed train, with a top speed of 224mph (360.5kph), represents the state-of-the-art in train design, and is being used as the reference train for those planning HS2 in London and further afield.
But Alstom is making advances in the design, in anticipation of schemes such as HS2 and other high-speed rail projects, says Watson. “We’re developing the next generation of AGV. A train that doesn’t exist today will be the right choice for HS2. The fact that the current AGV is the reference train sends out a signal that we’re serious. But when it comes to the final decision on rolling stock for HS2, it won’t make a difference.” He believes it is essential that the project goes ahead.
Meanwhile, technological developments in the European rail traffic management system (ERTMS) and train management systems (TMSs) should improve the experience of commuters in cities such as London, which is a “screw-up”, he says. “The question is: how can you take an existing, dedicated line and pack it with trains that cannot crash? You need to be able to automate that to the extent that you can, and ERMTS and TMS allow you to do so, reducing headways [distance between trains]. Ultimately, you can have driverless trains, which goes even further. But other countries are ahead of us. We’re just starting to ask these questions.”
Watson also believes that London could do with a second Crossrail route. The business case for a second south-north route has proved itself and the example of RER Ligne B in Paris, completed in 1977, provides a model that shows it will work, he says. “I think Crossrail changes everything for London. We now need a vertical line B, which is Crossrail 2. The business case is solid.”
All these projects – both Crossrails, rail electrification, the London Underground upgrade programme, HS2, nuclear new-build – create plenty of current and potential demand for Alstom’s services. It will continue to partner with other organisations to deliver large-scale projects, says Watson, ramping up its resources as appropriate. The challenge is to ensure that responses to demand are sustainable. “If we get a decision wrong, it’s a factory closure and the loss of hundreds of jobs,” he says.
The aim should be to export a far greater proportion of British rail technology overseas, he adds. There should be a focus on increasing investment in the existing network alongside marquee projects such as HS2. “We have a whole generation relying on the rail network, which is predominantly Victorian, and more than 50% isn’t even electrified. More spend on the Victorian network would probably get you somewhere better. There mustn’t be a drop-off in investment. It becomes a question of where you put the money. For commuters, the big question is London. And HS2 is addressing a different one with the connectivity of the rest of Britain,” he says. Whatever happens, HS2 is unlikely to proceed smoothly, he concedes.
Winning more business will encourage Alstom to take on more engineers, as it collaborates with partners such as Babcock, and with engineering and construction group Costain. “We have plans to ramp up through to 2019, and a 10-year vision of growth,” says Watson.
The onus is now on Alstom to prove that its technology, and the delivery of that technology, are sustainable, as the supply chain for major projects comes under more scrutiny than ever before. This process involves risk, he says. “It is widely misunderstood that civil contracting companies take on similar risk to us. But we have factories to maintain: we’re unusual in that most of what we sell, we also make. If you make a mistake in one country, the international basis of our business is such that the story goes around the world.”
For example, he says: “When there was the high-speed train crash in China [July 2011], someone erroneously, connected that event to Alstom, and the story made its way to Europe. The protection of our brand is important to us.”