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American Transit Expert Rides to the Rescue of London's Underground

Management: Robert Kiley's job of overhauling 'the Tube' has landed him in a battle over privatization-- and a power struggle between the central government and city leaders.


LONDON — Transportation czar Robert Kiley, who saved New York City's subway system from terminal decay, is late for his first appointment of the day thanks to delays on the London Underground. He was stuck on a stalled subway train when he should have been at his desk.

"Twelve minutes outside Victoria Station," Kiley muttered as he hustled into his high-rise office.

A cynic might say this is good theater: a perfect entrance for the American who was brought in to overhaul London's subway system. A commuter, however, would know that Kiley has simply experienced a typical morning on "the Tube."

London's chronically underfunded and overworked subway has not deteriorated to quite the miserable condition of New York's system, "where fires on trains were not extraordinary and derailments were not uncommon" when Kiley took over the Metropolitan Transportation Authority in 1983. "We're not to that point yet," he said, "but it will come to that if the rehabilitation does not start."

But while London's problems might not be as bad, fixing them might not be any easier. On assuming his post last month, Kiley stepped squarely into the middle of a battle over privatization of the London Underground--publicly siding with the mayor against such a move--and into a power struggle between Britain's strong central government and the city's newly devolved Greater London Authority.

Moreover, Kiley is an outspoken New Yorker trying to push the world's oldest subway system into the 21st century in a political culture that has tended to value polite discourse over fast-paced change. Will this work?

"I don't know," he said. "My sense is I'm having some impact."

Kiley, 65, was hired as transportation commissioner by London's first popularly elected mayor, Ken Livingstone. The maverick politician long ago was dubbed "Red Ken" by Conservatives for his left-of-center views and last year was kicked out of the Labor Party for daring to challenge Prime Minister Tony Blair's handpicked candidate. Livingstone ran as an independent and won the May election handily.

Since taking office, Livingstone has been challenging the wisdom of Deputy Prime Minister John Prescott's plan to partially privatize the Underground to raise the estimated $12 billion that Prescott said will be needed over 15 years to maintain and upgrade infrastructure.

Prescott, who also serves as transportation secretary, proposed a public-private partnership in which the government would transfer tracks, signals and stations to three privately owned companies on 30-year contracts, while leaving operation of the trains to the publicly owned London Underground.

Livingstone wants to finance the investment through municipal bonds and keep the system in public hands under single management. He brought in Kiley--a former CIA manager of intelligence operations and Harvard Business School graduate, as well as a veteran of the New York MTA and Boston's Massachusetts Bay Transport Authority--to make his case.

And that is what Kiley has been doing in media interviews and meetings with the deputy prime minister. Calling Prescott's plan "fatally flawed," he argues that the government is hawking part of the Underground without knowing the full extent of its problems. He believes that the investment required will be closer to $30 billion in 15 years and twice that in 30 years, and that the government eventually will be forced to subsidize private companies to make up the shortfall.

"Who pays the piper? The Greater London Authority? The national government?" Kiley asked. "If so, why go through the convolutions [of privatization]? Be upfront."

Although many Americans have taken high-profile management jobs in Britain, few, if any, have spoken so boldly on a public policy issue. Such pressure from a foreigner is a gamble that might be paying off.

Last week, Prescott agreed to include Kiley in the decision-making process. After initially holding back, he gave Kiley full access to all of the information surrounding the Underground and bidding for privatization and asked him "to take the lead in working up proposals for modifying" the privatization plan. Prescott said the government and London Transport would agree on any final proposals.

"It isn't a deal, but it is a big step forward," said Kiley's aide, Mark Chapman. "As Bob said, before, we were outside the tent looking in. Now we are in charge, although with parameters."

During his seven years at New York's public MTA, Kiley oversaw a vast program to rebuild subway tracks, switches and trains. He raised municipal bonds and successfully lobbied the state Legislature for $8.4 billion toward the work, nearly all of which was done by private companies. He instituted long-term planning, hired top managers to run the system and employed squads of cleaners to get rid of graffiti and trash, moves that increased ridership by about one-third.

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