Examination of witnesses (Questions 200
WEDNESDAY 16 DECEMBER 1998
CHILD and MR
200. Where you want to go is where you think
there are certainly going to be people. You do not want to have
to go anywhere where you might encourage growth or an expansion
of either industry or population?
(Mr Child) I do not think I would want to be in
a position of being thought to be saying that. We are trying to
look at the most commercially attractive option for utilizing
this rolling stock.
201. Is there a particular reason why Watford
would not do?
(Mr Child) I think in our report we have highlighted
Watford and it is a fortunate aspect of the Deputy Prime Minister
asking us to prepare the report that we have put a lot of work
into looking at the market demand and assessment for a Watford-Kensington
service, which itself catches a lot of the west of London market
in terms of the diverted air traffic, but equally allows us to
contemplate inter-connections with the regions. Chairman, it is
quite interesting to think about what the French are doing and
have done for a number of years now in terms of their TGV services,
where they are building hubs to foster and develop an initial
service with connections and as the market grows they extend that
service into a through service.
202. Mr Child, that is quite an interesting
example because if you look at Charles de Gaulle, which has three
train services under its main grouping, they do not even pretend
to think that that is going to be a regional interchange, do they?
(Mr Child) I do not know.
203. I think the Committee is in some difficulty.
Virgin comes along and says that they can operate the regional
service without any problems but then you come along and say,
"No, basically we have looked at it and we think that the
only way we could do it would be to have a very large catchment
area and that must be within the South East and, secondly, we
do not believe that even with the advantages of these new train
services we could produce the results". I am also not quite
clear where you are really placing the emphasis. You are really
saying people are not going to come off aeroplanes and go on to
trains, they are just going to be generated in the South East,
are you not?
(Mr Child) That is my view of the potential for
a Heathrow service. I think it would be largely focused on those
passengers making one journey from Heathrow through to Paris.
204. So you think that Virgin have made
yet another mistake?
(Mr Child) I am struggling with the Virgin proposition
because I do not know enough about it, but on the face of it it
looks as if there is something at odds with our conclusions.
Chairman: I think
we have worked that out.
205. How much public money is involved in
your company and in this consortium? How much public money do
you perceive you are getting from next year and the year after
and how much have you already received, if any?
(Mr Child) We are not receiving any.
206. No subsidies of any description?
(Mr Child) No, we are not receiving a subsidy,
but clearly the Eurostar business is running at a cash-flow deficit
which underneath the structure of London & Continental is
being funded by London & Continental.
207. There is no public money going into
this system or into Eurostar or into any of the proposals that
you have to open up a service to Heathrow?
(Mr Child) In Heathrow it will have to be a commercial
proposition otherwise it just will not happen. In terms of the
existing service, that clearly is part of the overall rescue package
that has been put together by the Government with underpinning
in terms of the building of the Channel Tunnel Rail Link and the
on-going cash-flow requirements of the existing Eurostar operation.
208. Mr Child, is it your view that Virgin
overall make a profit?
(Mr Child) I have absolutely no notion. I read
the papers and the journals and there is obviously speculation
about the financial position of Virgin and its constituents parts.
I do not believe I am in a position to comment on that, I am afraid.
209. Mr Child is not in a position to comment
on Virgin's business plan or any other aspect of it. The report
you presented came to the conclusion that certainly at the moment
the regional Eurostar services would not be commercially viable.
Is it true to say that Virgin, who say they can operate it viably,
were not consulted at all or were they consulted and they did
(Mr Child) We had a number of meetings with Virgin.
Indeed, the Government requested that we meet with them to incorporate
within our report on the viability of the regional services their
thoughts and their considerations.
210. But you are saying to us that the information
that they gave you was not sufficient for you to make an assessment
of the viability of the proposals, is that correct?
(Mr Child) That is correct.
211. Did you ask them, Mr Child, why it
was they were not providing you with adequate information for
you to make a judgment?
(Mr Child) We asked for the information. I do
not know why they did not give us the information. They may well
have perfectly good reasons.
212. Is it not strange that they would not
give you the information and yet they came to this Committee and
said, "We can break even in three years, we have got a robust
business plans and we want to operate it"?
(Mr Child) It is strange. I cannot explain it.
We asked for the information and we were not provided with it.
213. They did not say, "Because you
were in opposition to us at another point and even though you
are now supposedly producing an independent report, we cannot
give you this information because you might use it in some other
(Mr Child) They certainly did not say it to me.
214. Did they refuse to give you the information
directly or did they not reply?
(Mr Child) They were asked directly to help us
and provide information and I believe the Government asked them
to do the same and they decided not to at that stage.
215. And you gave them a two year time span
in which you would expect to be given the information to enable
you to judge clearly what the options were?
(Mr Child) Virgin and their representatives were
very, very well aware of the very tight timetable that we were
working to. We had a number of meetings during the course of that
process for them to share that information with us.
Chairman: Thank you
very much. I think, Mr Child, you have made your position very