Examination of Witnesses (Questions 160
WEDNESDAY 5 JULY 2000
160. I think you are very lucky it was only
24 per cent.
(Mr Green) We cannot apologise perfectly to every
single person on the day.
161. The point is you cannot get on another
train next week.
(Mr Green) But your question was how does a customer
get his voice heard and there is more going on behind the scenes
than you may see in the Committee room.
162. I got on the same train last Saturday and,
Lord help me, you threatened to put me off at Watford again. I
have to say my language at that point was "plain" is
probably the best term. Due to the ability of a railwayman on
the train that was not necessary and we staggered on to Euston.
I think the point that is being madeand I am sorry but
some of us live with railwaysis that all this afternoon
we have heard about everything but not about the passenger and
about how the passenger is treated or the passenger gets to respond
to this or the passenger is able to
(Mr Green) We have 22 extra staff booked out at weekends
for this particular problem for the passengers, no-one else. We
have six extra locomotives hired out in case anything breaks down.
We have a major operation of buses and coaches and taxis to support
people in trouble.
163. Lovely, but on the hottest day of the year
people do not want to get out at Watford with their luggage and
go by bus to Euston. They did not have to on that occasion, they
had two whole Sprinters to cram into.
(Mr Green) We are at risk until 23 September when
the whole of the Euston work is finished. We could not be doing
more in the short-term. We are passenger oriented and I am doing
almost nothing else myself at the moment.
Chairman: Fine. I hope you had a lovely time
at Watford. I will look for you next time I am thrown off there.
Sorry, I beg your pardon. My goodness, this Committee is bad for
my blood pressure. Mr O'Brien?
164. Reference has been made to the review of
the franchises and these are now being replaced, the process is
in being. ATOC have said that some of the bids are expensive.
What steps are the SSRA taking in order to provide a clearer lead
to bidders about what it wants from the franchise replacement
(Mr Fearnley) We do welcome the fact that bidders
are being advised to put forward a vision for that part of the
railway and not be constrained at the early stages in the bidding
process by very firmly fixed views. We believe, as I am sure the
SSRA do, that is the way we will best achieve the right solution
for each part of the railway through this process. The process
itself as a result of that is a long one because the SSRA are
having to evaluate a range of bids submitted under different criteria
and then going on to a short listing process before they are narrowed
down to two final bids. Two or three of the franchises are at
that stage and we know that our members who are bidding are spending
two to three million pounds in costs and fees just to get to that
stage. That clearly is a huge sum of money when there is no certainty
of success. Whilst applauding what SSRA are trying to do, the
very fact that it is an open book process means it is going to
be expensive and there has to be a fear that because of those
costs certain bidders may not be attracted to go forward because
of the risk of losing. What we have proposed is when the SSRA
have got down to the final two bids and start evaluating those
two and have negotiations with those two before they come up with
a preferred solution, a process which itself could take some months
and involve each of those two bidders evaluating a whole range
of new proposals to them, the SSRA will underwrite the reasonable
bidding costs of the bidder who would then lose.
165. Why should they do that?
(Mr Fearnley) To incentivise people to come forward
and to stay in the process and to put their best foot forward.
166. You are seriously saying that you think
people are going to have a go at getting these franchises but
they might be so put off that they are going to run away because
they think they are not going to get all their attempts at doing
the calculations underwritten by the SSRA?
(Mr Fearnley) There is no question that the early
stages of the bidding process should be underwritten, but once
the SSRA have developed the process down to just two bidders
167. Is not the cost at the early stages? People
have got to do research, they have got to go into the details,
so the cost is at the early stages. You said earlier that some
people are saying "we cannot go out for this because it will
be too expensive". It is the early stages that they are looking
(Mr Fearnley) I am not so sure. Whilst there are clearly
costs at the early stages I would be surprised if SSRA felt comfortable
underwriting all bidders because they would want to see the quality
of the bids coming forward. Once they have evaluated the top two
in terms of quality, what those bids will do for the customer
and the value for the taxpayer then the experience we are seeing
so far, and I accept it is still the early days of the process,
is there seems to be a long torturous process once those two come
into play whilst each is asked to look at the other's proposal
and put their own in. It is that that is racking up the cost to
a level that is making bidders feel uncomfortable. I think everyone
who is bidding accepts there is a base cost.
168. Did I hear you correctly, that each will
look at the other's bid?
(Mr Fearnley) Not the bids themselves but my understanding
is if the SSRA are faced with two proposals for the same line
but with very different base cases, very different ideas, they
are asking the other bidder to put their views forward on a particular
aspect. They would not see the bid, I am not suggesting that for
one moment, but to then have to evaluate at short notice other
aspects of the bid so that the SSRA can come to a level playing
field on which to make a decision.
Mr O'Brien: Can we just go back to the question.
What should the SSRA be doing to make it clear to the lead bidders
about what it wants? What should they be doing at the very beginning?
169. Should it be related only to cash?
(Mr Fearnley) No, it certainly should not be related
to cash. The SSRA are developing all the time what they are requiring
from bids generally in terms of meeting the needs of customers,
in terms of value for money and so forth, but the process is wide
open in terms of asking bidders to say how they would meet the
needs of customers on that line, which we welcome, and that is
what is becoming expensive.
Chairman: We have got the message, Mr Fearnley.
Whether we accept it, of course is another matter. Mr Bennett?
170. When you were asked about freight you very
neatly moved on to the question of the co-operation of the freight
operator to reduce one of the pinch points. A lot of the pinch
points are going to be in place for quite a long time. How should
priority be worked out between passengers and freight for access
time along those pinch points?
(Mr Green) I think the word co-operation is going
to come into the answer. For example, when we re-organise the
cross-country timetable for double the number of trains, we volunteered
to go on to a clock face interval around the country and give
up all our other rights. That will give a lot more slots for freight
at predictable times around the country.
171. Should not the Regulator be looking at
some way of balancing the demands of freight against the demands
of passengers purely for profit?
(Mr Green) It is going to be the "Judgment of
Solomon" because I think the railways have got to the stage
now where it is becoming so full that you are either going to
stop people going to work as commuters or stop freight moving
to the docks. I think we have got to put more capacity into the
172. Apart from Solomon making the judgment,
you have no advice?
(Mr Green) I have got no "one line" which
would solve the problem.
173. Can you very briefly explain to me these
special purpose vehicles which your members and Railtrack seem
to be disagreeing about? What is one of these special purpose
(Mr Fearnley) I do not think a framework has yet been
developed, to precisely answer your question, but it is vehicle
by which there can be an asset brought on to the railway network
or an asset enhanced, whether it is a station or some track, which
attracts external investment, not from Railtrack, and not from
the train operating companies. to support that investment. It
is a contract which will enable third party investment to come
forward to assist and to add value to the railway.
(Mr McTavish) And the reason for it being called special
purpose is that it is not like a normal company that may have
a diverse series of outputs it is trying to achieve. It is designed
for a specific special purposethe building of a piece of
track, the building of a new stationhence the name special
174. Gentlemen, you have been very tolerant.
Thank you very much indeed. We shall cogitate upon your many misdemeanours.
(Mr Fearnley) Thank you, Madam Chair.