HOWZAT

“What we haven’t done effectively is to compete against road-freight operators, and that’s an area where we’re setting ourselves up in a position to move forward.”

Those traditional rail-freight areas — aggregates, minerals, cement, coal — have propped up the sector for decades. Yet, contrary to popular perception that rail freight is dwindling away, recently it has been making a comeback.

Rail freight in Britain is now up to its highest levels since the 1970s. EWS, with turnover close to £500m, is shifting 100m tonnes a year — the equivalent, as Heller likes to point out, of 15m lorry movements. And Europe is finally opening up its rail markets, offering huge freight opportunities, especially as manufacturers look to shift loads from cheaper east European countries to the rich west.

Heller has now got locomotives and drivers in France, where he plans to compete for orders with SNCF. He is talking to other national rail groups across the Continent about partnerships, and lobbying to keep access fees through the Channel tunnel at a reasonable level. EWS also has a maintenance, refurbishment and leasing business, Axiom Rail, that is growing fast.

To push all that forward, Heller is going to need more cash for investment, leading some to predict that EWS (it stands for English, Welsh and Scottish railway) will next year be announcing its own flotation.

Heller plays it down, pointing out that its current owners — Canadian National, Berkshire Partners, Fay Richwhite and Goldman Sachs — have already taken money out by refinancing EWS, and are in no hurry to sell it on.

“We have lots of options and our shareholders will be working out those options,” he says carefully. “But Europe is very exciting. It is a wide-open market dominated by lorry and begging for rail options.”

Heller, who sat on EWS’s board before taking the top slot, knew what he faced when he joined the British firm. Thrown together from five former British Rail freight businesses and a National Power unit that shipped coal to power stations, EWS was seen by many in the industry as slow, unwieldy and hamstrung by traditional ways of working. It also lacked friends. Its previous chief executive had walked out, according to press reports, because he felt that the government simply wouldn ’t provide proper backing for rail freight.

“And when I arrived,” says Heller, “the Royal Mail had just decided to take rail out of its distribution model — that was 8% of our total revenue. So the business was in some difficulty. We needed to streamline processes, make our assets more effective, and also get customer services in order.”

In particular he wanted to end EWS’s reliance on “unstructured flexibility”, continually changing services to suit its customers.

“We were bouncing around every week. It would be like British Airways changing its flights every week. It was very inefficient, and also highly likely to fail on behalf of the client. So what we worked for was a stable plan, certain trains going from certain destinations at certain times regardless of what was ready.”

He knew, from his Canadian experience, that this system worked in the long term. Others suggest that British colleagues have found his aggressive determination hard to keep up with.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive