Mel Ewell: The PPP tiger that caught its tail on the Tube

The chief of Amey tells Abigail Townsend how his support services group has climbed out of Underground misery while its rival flounders
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Just as comfortable talking about his kids or his passion for fishing as public-private partnerships (PPPs), he even has a 16-year-old in tow - Jack, a work experience lad Ewell has allowed to shadow him. You cannot imagine Alan Lovell, his opposite number at Jarvis, behaving in quite such a relaxed manner.

But then Amey's troubles, unlike those of the stricken Jarvis, are finally behind it. In 2003, the company's market value had plummeted as it struggled for survival. Executives had deserted ship, its accounting practices had been called into question, the dividend was scrapped and it was faced with debts of £190m.

Ewell had joined in 2001, as director of operations, but just two years later he replaced the chief executive, Brian Staples. "It's been interesting," he notes wryly. "Up until 2001, Amey had been a real tiger company. It completely transformed itself to move into the public support services arena, and I can't think of another company that's done that.

"But it got to a point when it became very evident the company had overstretched itself. The good news is that Amey never had any question about the quality of its operations: the business generated good cashflows from good operations. But it had very much unbalanced itself in the charge towards structured finance deals. It was draining the company of cash and it got into a great deal of difficulty."

In particular, Amey was struggling to find the cashto participate in Tube Lines, the consortium assigned the upkeep and refurbishment of London Underground's Northern, Jubilee and Piccadilly lines. At that stage, it owned a third, beside Jarvis and the US giant Bechtel.

Ewell set about slashing costs, stripping out around £20m from Amey's overheads. But he cannot take the sole credit for saving the company; ultimately, it was the Spaniards, in the guise of construction giant Ferrovial, who came to the rescue, snapping up Amey for £81m in April 2003.

Ewell says the company is now in good shape once again, with 2004 pre-tax profits coming in at £21m on revenues just shy of £1bn. And last Christmas, in a reversal of fortune as Jarvis became the latest PPP darling to hit the skids, Amey bought out its stake in Tube Lines for £147m, making it the majority shareholder.

Ewell is now on the lookout for more deals. "If I can find an opportunity that's right for the company, that makes sense, then we will go for it. But it's early days yet. We know our markets and the organisations that would be supportive to our strategy. It's got to add value."

The 2012 London Olympics have also caught his eye, and not just because he's prone to the odd spot of French-baiting - "It's fantastic news," he quips, "especially looking at the countries we had to beat to get there." The building or upkeep of transport links, either through Amey or Tube Lines, is the main area of interest. No official moves have been made but Ewell says he's already talking to "all kinds of people about it".

Amey is also bidding to maintain Birmingham's roads - a contract worth around £2bn - and is pursuing various contracts with local authorities.

Yet not everything is rosy. For a start, while Amey may be on a stronger footing, the reputation of PPPs remains as shaky as ever. Last week, The Independent on Sunday revealed that annual profits at Tube Lines had surged by 37 per cent to £57m, even though the Northern Line is the worst performer on the London Underground. A report in July by Transport for London, meanwhile, damned both Tube Lines and fellow consortium Metronet (which is responsible for two-thirds of the network) for missing targets - sentiments expressed earlier in the year by the Transport Select Committee.

Yet Ewell appears, genuinely, to believe in PPPs. "It's easy to apply blanket statements, yet the majority of [projects] are largely successful - both for the employees who transfer over and for the investment. We add value. We build better schools for children, or better hospitals, and that's the end of it."

But even Ewell, with all that passion, concedes that mistakes have been made. "There was too much haste in putting out too many projects to market. There were too many organisations - and I would put Amey among them - which raced to bid when the whole industry should have said: 'No, that isn't going to work.' That lesson has been learnt and learnt very painfully."

Another painful lesson has been Amey's involvement with city academies. Ewell stresses it is not a PPP contract - that Amey simply provided a one-off, £2m sponsorship for the Unity City Academy in Middlesbrough. However, as it has failed its Ofsted inspection and has run up debts of £1.5m since opening in 2002, it's hardly the best PR for the company, he admits.

There are no plans to pull out, and Ewell says the "vast majority" of parents and children are supportive. "It was a bleeding difficult environment before we sponsored it, and it still is. But we will turn it around." An admirably loyal stance - though Ewell also concedes that Amey will sponsor no more schools.

Education is close to his heart. The son of a housewife and a factory worker, he went to school in the West Sussex seaside town of Bognor Regis - an area of narrow horizons, he says. "I always wanted to go to university and it wasn't normal in Bognor that people went away." But he insisted on carrying on into further education, although he did take a year off before and after college to indulge his love of boats, sailing across the Atlantic and then round the Caribbean.

This experience, more than anything - including his hard-won college place - gave him a "very different perspective on life", he says. "I found that if I had any talent, it was working with people and building teams; no one person can sail a yacht himself. So I went into sales. Seemed like a natural thing to do."

And that fairly much sums up Ewell. Despite being 46 and chief executive of a leading support services business, he still seems more of an enthusiastic salesman than a hard-nosed City suit. As he is the first to admit, he simply has no grand career plans beyond the here and now. "I'm not that stuck in my thinking. Do what you can and the best you can and see what happens. You can't ask any more than that."


Mel Ewell

Born: 20 September 1958.

Education: BSc in geography from Kingston Polytechnic.

Career (1980): various sales roles at shipping firm United States Lines.

1983: sales positions at Rank Xerox.

1988: general manager of the dealer network at the office products business Harris.

1990: various roles at logistics group TNT, including director of sales and marketing for the UK, and managing director of UK and Ireland.

1999: managing director of aviation services, Europe, for US group ADI.

2001: group director of operations, Amey.

2003 to now: chief executive, Amey.