FIRSTGROUP Chief Executive Sir Moir Lockhead is to retire next year, on 31 March.

He will be replaced by Tim O'Toole, who was previously managing director of London Underground and joined the FirstGroup Board in May last year.

He became chief operating officer and deputy chief executive in June.

Sir Moir, whose company currently runs three rail franchises and has a majority interest in a fourth, is warning that railways must become more efficient.

In an interview for Railnews Focus to be published later today, Sir Moir warns that the priority is to become more efficient, ‘because there is less to spend’.

He is continuing to defend the higher-risk, entrepreneurial model of rail franchise in preference to concessions, such as Manchester Metrolink and London Overground, which involve low commercial risk but leave the franchisor in almost total control.

However, he is calling for longer franchises, with greater incentives for franchisees to invest.

As far as FirstGroup was concerned, he said he believed the time was right for him to step down.

“I firmly believe that timing is everything and with FirstGroup in a strong position to continue its successful development the time is right for me to hand over to an outstanding team led by Tim O'Toole.
 
“Over the past 21 years I have had the privilege of leading the Group. During this time the pace of change and the level of success we have achieved have been extraordinary. From the employee and management buyout of Grampian Regional Transport we have built the Group into a leading international transport provider with revenues of over £6 billion and more than 130,000 employees worldwide. The Group's success is built on the commitment and professionalism of our employees and their dedication to serving our customers in their local communities.”

He will hand over his executive responsibilities on 1 November. He explained: “This will enable me to assist with the transition and provide any support as required to Tim and the Group.”