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'We Specialise in Franchising' interview adam leishman One of 380 buses that Tower Transit Singapore will begin operating later his year ‘We specialise in franchising’ Adam Leishman talks about Tower Transit’s ambitions in Singapore, London and the rest of the UK 2016 will see the 30th If these powers are implemented it will be company as a “franchise specialist”. anniversary of bus a huge change for Britain’s bus sector. Despite The company is a spin-off from Transit deregulation - but will there their opposition to franchising, it seems Systems, a company which won its first tender be a 40th anniversary? For unlikely that the ‘big five’ groups that dominate for bus operation in Perth, Western Australia, the past three decades, the industry will disappear (they’re happy to in 1995. Today the company operates a fleet Robert Jack private operators have operate within the franchised environments of around 1,000 buses in Australia, with Managing Editor played the dominant role of London’s bus market, the railways and contracts across the country. Tower Transit in planning and providing local bus services elsewhere), but could this revolution open up is a separate business, although it does share in England (outside London), Scotland and the market to new entrants? some of the same shareholders as Transit Wales, with local authorities and passenger London-based Tower Transit is one of the Systems. Leishman is one of four Tower transport executives limited to procuring companies that is waiting for this opportunity Transit shareholders, along with chairman Neil ‘non-commercial’ services on the periphery. to emerge. And the group’s Australian chief Smith, who is a co-founder of Transit Systems. Over the past 18 months, however, chancellor executive, Adam Leishman, describes the The pair of them have relocated to London, George Osborne has included bus franchising where the company now operates 430 buses powers in devolution deals with a succession for Transport for London (around 5% of the of English regions - Great Manchester, “We’re looking at long market). The remaining two shareholders are West Yorkshire, the North East, the Sheffield term partnerships with based in Australia and are actively involved in and Liverpool city regions and Cornwall the Transit Systems business. - and more look set to follow. our government clients” Tower Transit was founded in 2013 when 32 | 8 January 2016 www.passengertransport.co.uk PT_Issue125_p32-35 32 06/01/2016 13:02 “We are constantly scratching our head at some decisions made by larger operators” Leishman and his fellow shareholders Transit is focussed on delivering its contract the culture developing is extraordinary and acquired three London bus depots which commitments, which include moving into there is genuine excitement about the change UK-based PLC FirstGroup had been forced a brand new depot, procuring a fleet of 380 we are already bringing to the community.” to sell off in a fund raising exercise. Unlike buses and hiring 900 employees before Andrew Bujtor, an Australian with a FirstGroup and many of its other peers, operations begin later this year. He is pleased background in finance, has been recruited Tower Transit is not publicly-listed. It isn’t to report that well over 2,000 people recently from outside the bus industry to head government-owned either. Leishman describes turned up to Singapore’s first ever depot open Tower Transit Singapore. He is assisted by it as a “family business”. day, exceeding all expectations. operations director Stuart Thomas and “I think bringing the shareholders into the It’s a high profile contract - on the day it was engineering director Satnam Cheema, who management enables us to have a very strong announced the news shared the front page of have each been recruited from the ranks of connection with our staff,” he says. The Straits Times along with the Conservative Tower Transit’s London bus business. “Our staff know who they are working for, victory in the UK general election. Singapore aspires to be a leading global city rather than working for faceless shareholders “Five million people in Singapore are and its leaders felt that its bus network had and that builds a really strong culture.” watching closely and have been tracking our been under-performing. After travelling the Does it also help to be free of the demands to progress,” says Leishman. “It’s unlike any world to look at examples, the LTA found hit short term profit targets that PLCs face? contract we’ve been a part of so far. London and Perth to be the best delivery “We are constantly scratching our head at “We’re 100% committed to executing that models. They then took the best elements some decisions made by larger operators based to perfection because not only Singapore, the of both of those models and customised it on analysts’ three-month reports in an industry whole world’s watching it. This in my opinion for the Singaporean environment. Whereas that requires significant infrastructure and is probably the most exciting bus project in London’s network is tendered out on the basis capital investment over long periods of time,” the world - not only just to win a contract but of individuals routes, Singapore has opted he responds. “We are looking 10, 20 years out.” actually to transform a system. for area franchises, based around a depot. Leishman cites the example of the group’s “And being focussed has paid off - with And while London’s bus operators own their capture of the first contract awarded by 900 positions to fill in an industry with depots, Singapore’s LTA will lease these Singapore’s Land Transport Authority to run staff shortages we have had almost 6,500 facilities to the franchisees. buses in the city state. Singapore is moving applications for jobs so far, with many new to Leishman believes that Singapore has come from a concession-based system, where two the industry, and we are still five months out up with a bus franchising system that will operators effectively had their own monopolies, from commencement, the depot is outstanding, deliver huge improvements over the coming to a franchising model, and he believes that the years and will come to be regarded worldwide company’s long term investment horizon is vital as an example of best practice. to making the venture a success. “They came up with a model which I think “We are not looking at that as a short term will rival London as the world’s best,” says contract,” he says. “We are doing things to Leishman. “I think they’ve really nailed it.” invest in a city’s system and redefining it, and They key to success, he says, is getting the that takes a long term perspective on things, right balance between the government and the and that’s how we run our business in the UK. private sector, to get the best out of both. We’re looking at long term partnerships with “We’ve seen a lot of models out of balance,” our government clients.” he says. “I think that sets us apart from companies “If it’s too much government sided, it doesn’t that have to report to thousands of shareholders work as well as it should for the community on a regular basis,” he adds. “They’re focussed and it’s not good value for money. on much more short term horizons.” ADAM LeiSHMAn “And if it’s too lop-sided to the private side, The expansion of Transit Systems in Adam Leishman’s father, Graham, was one which I think is the issue here in the UK at Australia, and latterly Tower Transit in London of the three co-founders of Transit Systems. the moment, then ... the community is not and Singapore, has been through steady, At that time, in 1995, Adam Leishman was getting the service to levels that they could if incremental growth rather than a big bang heading to university to study commerce. there was a very strong partnership between approach. “We are a very risk averse company,” He later worked as banker before moving into government and private with clearly defined Leishman explains. “Whilst we are ambitious business development for a retirement living and balanced powers, which I believe only the we always want to over-deliver to our clients, so company and running a student accommodation franchising model can offer.” we make sure we don’t over extend ourselves.” business. He joined Transit Systems as business He adds: “Franchising is a framework and it For example, having won the first Singapore development director in 2008 and became chief can be customised to the unique environment contract, Tower Transit chose not to bid for executive of international spin-off venture of each city, and that’s the beauty of it, whilst the second, which has since been awarded Tower Transit in June 2013. ensuring competitive tension which is necessary to the UK’s Go-Ahead Group. Tower to get the best out of private operators.” www.passengertransport.co.uk 8 January 2016 | 33 PT_Issue125_p32-35 33 06/01/2016 13:02 Although he’s a businessman, Leishman says requirement for more buses.” competitive advantages to some companies that it’s important to recognise that public The Singapore contract and the existing over others,” he says. “If those issues are not transport offers things that are not measurable London operation remain Tower Transit’s addressed the benefits won’t be optimised.” purely by profit, and therefore the government primary focus, but, as a ‘franchising specialist’, However, Leishman says that Tower Transit has a key role to play. “If those broader public the company is watching events elsewhere in and its Australian cousin, Transit Systems, policy issues are not addressed, and in a full the UK with interest.
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