Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of witnesses (Questions 240 -259)

WEDNESDAY 16 DECEMBER 1998

MR ROY GRIFFINS and MR MIKE FUHR

  240.  If you insist!
  (Mr Griffins)  It is a point and it was referred to. There have been a number of reviews on the need for, the rights and wrongs of, international rail services since then. So far as I know, so far as this Government knows, there has never been a wholly disinterested review as everybody has had some kind of axe to grind. I think that was obvious from your questioning of the previous witness. There are conflicts there, there are contradictions and as a minimum there is a lack of clarity.

  241.  That is why we want to know who you have asked and what you have done.
  (Mr Griffins)  We have not asked anybody yet and nor have Ministers finalised the terms of reference.

  242.  Mr Griffins, that is terribly important, is it not, because it is fair enough that you have not offered the job to anybody if you have not decided what you want to know, that would make it a bit difficult, but I think the Committee would like to have just a broad-brush approach to what you are asking.
  (Mr Griffins)  I am in a position to give you a broad-brush approach. We would expect the review to consider the commercial viability of regional services, the socio-economic benefits that would be derived in the regions from such services, the nature of the services, i.e. the points that would be served, the likely level of demand, certain technical considerations, the capacity of certain stations on the routes and we would also want it to consider the impact on the Inter-Capital services which underpin the Eurostar business, which in turn underpins the Channel Tunnel Rail Link, which the Government is trying to keep alive and believes it has succeeded in doing and that would have an important effect of the Channel Tunnel Rail Link project. We have not finalised them. We would like to get this commission under way early in the New Year.

  243.  So someone is going to have a busy Christmas!
  (Mr Griffins)  Putting them together, yes. But ideally we would like the Committee to be able to influence the process.

Chairman:  Mr Griffins, now we get to it, you want us to write the terms of reference. I am very glad you made that clear at the beginning of your evidence.

Mr Stevenson:  Just give us a piece of paper and we will do that now.

Chairman

  244.  Just hang around after you have given evidence.
  (Mr Griffins)  I am not being facetious. The Committee's views would clearly be helpful.

  245.  Heaven forbid that the Chairman should ever be facetious!
  (Mr Griffins)  The question is how we can get the Committee's input. Can we get the Committee's input in time to influence the terms of reference or can we ensure that before the process gets set in any firm way we can take your conclusions in?

Chairman:  Mr Griffins, I like people who reply to questions with questions. That always cheers me up. The reality is that you are saying to us you have not got the terms of reference fixed and you want to get this off at the beginning of the New Year, but you also want us to have some say in this. I think that is a very clear steer. We are very grateful to you. We shall take the rest of the evidence today and then the Committee will want to consider how they can immediately respond because an immediate response will obviously be called for and I am sure you will enjoy what you get.

Mr Donohoe

  246.  A point that has already been raised and we did not have an answer to is just where the traffic is generated that goes through the tunnel as is the present arrangement. Would it surprise you to learn that 80 per cent of it was north of Watford, that the business that is going through the tunnel is around that figure? You do not happen to know that? Is it possible for you to do an exercise that would give us some indication as to the regional spread of traffic going through the tunnel both in terms of freight and in terms of passengers?
  (Mr Griffins)  Personally I could not, but it is certainly possible to get it done.

  247.  Who would do that then? Would it be you that would do that, would it be the Department or would it be the operating companies?
  (Mr Griffins)  The Department could commission it.

  248.  And is that not something that you would see as having some sense about it?
  (Mr Griffins)  It would certainly have some relevance to this review.

Mr Donohoe:  Is it not possible that in actual fact Parliament was deceived by virtue of the fact that we would never have had that Act on the statute book had it been the case that all of the information that is now coming to hand was there and that the possibility of there ever being any regional services being put into service is zero? Indeed, in terms of trains, they will be diminishing even further by virtue of the fact that we have now got more and more low cost carriers in the air than there have ever been and there is the development of that as an industry and yet the whole concept of Eurostar as far as the regions is concerned, in particular as far as the northern regions is concerned, is just hogwash, is it not?

Chairman

  249.  Answer yes or no.
  (Mr Griffins)  I am not in a position to answer yes or no. I cannot answer for the passage of legislation in 1987, neither on behalf of the Government nor indeed personally. I do have a copy of the Channel Tunnel Act 1987 with me and I have got the terms of section 40 with me.

  250.  If you read all the debates at that time, and you will have done so like all good civil servants, you will know that of course nowadays it is possible to take into account consideration of any legislation which is set at the time and you will also remember what was said at the time was very clearly this would go ahead on the assumption that there would be a Eurostar regional service. All you are being asked is, is it true that Parliament agreed that at that time and this clearly was not the case.
  (Mr Griffins)  I think that is an interpretation.

Chairman:  I will take that as a yes. I am a very forward woman.

Mr Stevenson

  251.  Mr Griffins, we have heard from previous witnesses, Inter-Capital and Regional Rail and it is the regional bit that interests me because everything at the moment is capital and not regional. Given that the evidence that we heard earlier this afternoon indicated that the possible option of that organisation centring their future activities on Heathrow emerged about May or June, which at the same time was the ten per cent share taken by BA, and the Deputy Prime Minister appointed the same consortium to do this review in July, does it surprise you that this review operated by the consortium that indicated that one of their possible attractive options was Heathrow came out with a report that said "we do not think regional services using these sets is going to be viable"? Has that surprised you?
  (Mr Griffins)  No, it did not surprise me. The fact that you are asking the question I think is yet another part of the rationale for going for an independent review.

  252.  You have been very kind by answering the question, I am so grateful, but could I just follow that on. You very helpfully said that you were going to give us a broad brush view on the terms of reference that the Deputy Prime Minister may be considering in terms of his disappointment in the report assessment done by Inter-Capital and Regional Rail. One of the broad brush criteria that you said may be in there was social and economic benefits for the regions. I hope I have quoted you correctly. If that is the case, given your comment that you detect a conflict in the present system and a lack of clarity in the present situation, and given that Inter-Capital and Regional Rail have clearly given the way that they are thinking in terms of the developments that they may want which would benefit the South and South East and not the regions, why were they appointed the management agent yesterday? The point I am getting at is they have told us that they did not take the social and economic benefits of the regions into account at all. Given all of this lack of clarity and the conflict, the Deputy Prime Minister's disappointment, why were they appointed yesterday?
  (Mr Griffins)  There are a number of points I need to respond to on there. First, the lack of clarity and the contradiction——

  253.  Conflict.
  (Mr Griffins)  ——conflict that I referred to were in the context of different organisations' views for the prospects for regional services and their proposals for such. There are conflicts between them. As to the question of why this consortium was chosen, this consortium was chosen by London & Continental Railways as part of the revised proposals which were worked on between 28 January when the Deputy Prime Minister came immediately to the House of Commons to announce the imminent prospect of the collapse of the Channel Tunnel Rail Link and the return of the Eurostar business to the Government, and 3 June when he was able to announce a rescue.

  254.  Why were they appointed yesterday by someone? Was it Government that appointed them? Was it with Government's approval? Did you know they were appointed yesterday?
  (Mr Griffins)  Yes, I did. The deal was done on 3 June. The formalities were concluded in this respect yesterday.

  255.  Did that require Government approval at all or was Government not involved in that?
  (Mr Griffins)  The Government were involved in the deal, indeed the Deputy Prime Minister came to the House and outlined it.

  256.  When was the deal done?
  (Mr Griffins)  3 June.

  257.  Hang on. The deal was done on 3 June, which the Government knew about. I do not want to be unfair so I will try to choose my words carefully. This was a consortium that in May or June had given clear indications that one of their options for the future would be using the regional Eurostar stock at Heathrow. A report came out from them saying really that the regional Eurostar services are not viable and yet the deal was done in June and the Government went all through this and actually appointed them knowing full well that they were going to be management agents a month before the announcement. Is that correct?
  (Mr Griffins)  No. The deal in June was a hard fought—hard wrought rather than fought, I suppose fought as well—deal to rescue a project of a considerable number of billions of pounds which was underpinned supposedly by the Eurostar business, a Eurostar business which was when the project was originally conceived over-estimated in terms of its return.

  258.  I understand that, Mr Griffins.
  (Mr Griffins)  Therefore, when it was rescued in June what the Government attempted to rescue was the deal as it was rather than impose additional obligations.

  259.  I understand that. Forgive me, I really do not want to appear rude and interrupt you but if I do not I shall not understand and that means I will go out of the room more confused than when I came in. What I do not quite understand, if the Chairman will allow me, is this: the deal was done that included the appointment as the management agent of the consortium we now know as Inter-Capital and Regional Rail. That was done on 3 June. The Government knew about that. They did not say anything about it but they knew about it. In July the Deputy Prime Minister appointed that same

consortium—— You see the point I am getting at. I do not want to waste the time of the Committee but it is quite important that I understand.
  (Mr Griffins)  London & Continental Railways, the contracting party with the Government for producing the Channel Tunnel Rail Link, needed, amongst other things—


 
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