Simon Vivian begins

Simon Vivian is very fond of Bath. He studied economics at its windswept university. And after a period of working abroad he came back, settled down, and spent the next 17 years in this world heritage site, with its beautiful parks, graceful Georgian crescents and its bitter construction disputes.

Six months ago, Vivian, 47, left a top job at Hanson to replace Sir John Gains as chief executive of Mowlem. And, alongside his responsibilities for generaling a £2bn turnover contractor, he took on the job of fighting the battle of Bath Spa. As even casual readers of Building will know, this began as a fairly unremarkable scrap over peeling paint, then turned into a restaging of the battle of Stalingrad in a swimming pool.

Onlookers have watched with growing amazement, not to mention amusement, as Mowlem and Bath council competed to launch the most vituperative public attacks on the other. Or rather, competed to put together the most “systematic smear campaign”, as Mowlem phrased it in one memorable press release. At present, the project is more than five years late, its budget of £13m looks like becoming an out-turn cost somewhere north of £40m and Mowlem has left the building …

“The situation is just not good for anybody,” says Vivian, sternly, sitting in the boardroom of Mowlem’s offices in Isleworth, Middlesex. “Nobody is coming out of this very positively; it’s a very unfortunate set of circumstances.”

Vivian explains that Mowlem was not legally obliged to leave the project, but felt it was the right thing to do. “There was no point prolonging the situation. From our perspective we were in an impossible position – in a triangle between the architect and client.” So, once the council ordered Mowlem to leave, it was time to cut its losses.

Although the struggle on site may be over, the one in the High Court is just beginning. Vivian says Mowlem will pursue the council for “a not insubstantial sum in compensation … we have an extremely solid case”.

Bath Spa is not the only trouble Vivian has seen since he joined Mowlem as chief operating officer last year. In fact, it has been one thing after another. In March, the firm declared a £7.4m loss for the year ending 2004, and finance director Gerald Brown announced his resignation shortly afterwards – but not before giving an embarrassingly emotional defence of his record to the City.

Then there was the emergence of an “accounting issue” at an M&E subsidiary, the loss of chairman Charles Fisher and the accusations of poor workmanship on the West Coast mainline, which led to the humiliation of Network Rail banning the company from carrying out track renewals. If that weren’t enough, there have been four profits warnings this year – culminating in a statement on Tuesday that returns would be £20m lower than expected.

But the most frustrating thing for Vivian, personally, has been enduring the period between taking over as chief executive on 1 January and the departure of Gains in May. In effect, he has had to watch the horror show from the sidelines, with his hands tied.

“I feel like I’ve only been in charge properly for the past two months,” he says. In that period he has undertaken an internal review, and is about to implement its findings: the axeing of 150-200 jobs. “We have a new management team in place and I’m trying to instill cultural change in the company. You’ve got to remember that John Gains was at the company for a very long time, and there has been very little change in that time.”

So, is he pointing the finger at his former boss? “I don’t think our problems have been a direct result of Gains’ management,” he says. “I think it’s more about balance sheet issues. I have a more centralist approach to management and take a more prudent approach to financial issues. One example is profit recognition – I’m not prepared to take as much risk and perhaps have a different take on the value of contracts than his.”

I don’t think Mowlem’s problems have been a direct result of Gains’ management. I think it’s more about balance sheets

To underpin this more conservative approach, Vivian has appointed Paul Mainwaring finance director and has spent much of his time recruiting more financial people, as well as creating the role of head of risk management.

What does he have to say about the tenure and departure of Mainwaring’s predecessor? “I shouldn’t comment too much … he was holding things together until his replacement arrived; I shouldn’t comment further … I suppose that was a fairly guarded response.”

And guarded is a good word to describe Vivian’s body language: as he talks he keeps the kind of eye contact that batsmen reserve for wily leg spinners, and sits much as he does in the photograph on the right: square on and pulled up tightly against the boardroom table.

“Guarded” is the word that former colleagues use, too. “Simon has been very guarded since he took over; it’s a natural position to take when you are instilling change and getting rid of people,” says one. “You’ve got to remember he’s taken over from somebody who spent a lifetime at Mowlem, who had an established hierarchy and management team and who spent an eternity to eventually leave.”

The colleague adds that wary pragmatism is not the full story of Vivian’s personality. “You will begin to see the real Simon emerge as he asserts his control. He’s a friendly, straight, decent guy, who will give everybody he works with a sense of certainty so they can operate to the best of their abilities. Not only that, he’s likeable. He’s not caught up in the pretentiousness of the City, and if you’ve got a problem you can have a beer and sort it out.”

The next step in Vivian’s plan will be to undertake a review of the company’s business strategy. He will present his conclusions to the board in the autumn. It is likely that he will recommend disposing of some elements of the business, although he refuses to be drawn on which – except to point out that the company’s Australian arm will not be sold, despite industry speculation to the contrary.

Vivian denies that he plans to follow Amec into the support services sector and says he is committed to Mowlem’s present mix of traditional contracting and PFI work. Mowlem expects to reach financial close on the £5bn Allenby Connaught army accommodation PFI in the last quarter of the year.

Vivian is, however, concerned about the uncertainty of the PFI process in the short to medium term. He’s aware that leading industry figures are in a dialogue with the government over the cost of PFI bids. He says that the Treasury should address these issues before it signs off a fresh wave of deals. “There are certain value assumptions that are being tested by the government. The PFI may not be the wholesale solution it has been over the past 15 years … it’s in the melting pot.”

Vivian feels the same uncertainty about the way construction projects are managed by government at local level. As well as a certain heritage project in Bath, Mowlem recently completed the Spinnaker tower in Plymouth. This was also going wrong, but unlike Bath Spa, an amicable solution was reached. “The council was getting the right advice,” says Vivian. He adds that he may well become involved personally in the discussions to reach a settlement of Bath Spa. He claims that nobody has upbraided him in the streets of his home town, but is only too aware that the public feel the project is a “shambles”.

While that dispute simmers on the back burner, he will be meeting John Armitt, Network Rail’s chief executive, to try and save Mowlem’s rail renewals work. And if all goes to plan, the contractor should be back on the tracks by the autumn – at which point Vivian can start running a contractor.