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

Examination of Witnesses (Questions 240 - 253)



  240. In spite of your talented seminars, you have not persuaded Mr Corbett to. Was he not a finance director?
  (Sir Alastair Morton) That is right. Let me say where I agree with Mr Corbett again. He has a duty to his shareholders—

  241. We do hope so.
  (Sir Alastair Morton)—to seek a very good settlement from the Regulator in what is now going on. It is Mr Corbett's duty to fight for that favourable settlement any way he can.

  242. We are not in any doubt about who is responsible for what. What you are saying is that you think that because this is an infinitely variable procedure, it could be used in a number of different ways, he does not agree with you. Are we agreed on that?
  (Sir Alastair Morton) No, I am saying that he is free to choose interpretations of the idea which suit his current debate with the Regulator. I am saying that he has employed those to the full with considerable skill.

  243. What I want to know from you is what efforts you are making to give a very clear lead to the bidders in the franchise process about what you want from the franchise replacement. You will forgive me saying this and I say this in no pejorative sense, but we have heard from you today an extremely flexible and interpretative, indeed almost an impressionistic view of the different ways in which the franchise process can run. What is it which you are doing to make it quite clear to the bidders what you want out of the franchise replacement?
  (Sir Alastair Morton) We hope we have made it beyond doubt clear that we want a bigger and a better railway service.

  244. For?
  (Sir Alastair Morton) The customers.

  245. Good; it is nice to hear that word.
  (Sir Alastair Morton) This means that we want more capacity on the network, which means investment in hardware. That gets you into debates with Railtrack and everybody else. We want investment in what we sometimes call the soft issues, which is just a term for making the quality of service better: the whole journey experience from the time the person seeks to consider making a journey by rail to the time the person disengages from the rail system into another transport system as may be necessary at the other end, which in large part also requires investment but in quite different things. At the end of the day you arrive at what people call Morton's mantra, which is investment, investment, investment. People need to put the money into the business; the parties, in the plural.

  246. Fine, but in what? When it comes down to it I am offering you a deal which might give lower fares, better running, more services and alongside me is Mr Donohoe who is going to give you nice bright stations with lots of property advances and perhaps not such good terms for the passenger. What are you going to ask?
  (Sir Alastair Morton) By that time we are going to have gathered the views of the passengers, of the local marketplace, the communities served, which means the local authorities, the user groups and others. There has been a lot of consultation. It is an ongoing process. We shall have an understanding that what is passionately desired is that thing there. Obviously if you ask a person at eight o'clock in the morning whether he would like to have a train which got his nose out of his neighbour's armpit, that might be top of his priorities. When you talk to him after he has got home and had a drink in the evening, he might say he would like one which gets him to work on time, which might require a different investment.

  247. They might not necessarily be so completely different might they?
  (Sir Alastair Morton) They might not be, but you will have gathered these opinions, you will have a view of what is wanted. We shall have our own view the more franchises we discuss and review and OPRAF has been managing franchises, regulating franchises, for some time now. We have quite a lot of experience in how the desires, the complaints, the pluses and minuses have developed, are likely to develop. You put those against a picture of traffic and you come up and say what is actually possible and what is capable of being paid for. If taxpayers' money is to be used in larger quantities when there are fewer passengers who want that, is this going to be good value for money? At the end of the day it does come back down to that.

  248. Yes, but who judges that? May I just ask you something else? Are you confident that if the franchises for the local services are left to the end of the process there is going to be room for them within the system and are they going to be treated in a fair way?
  (Sir Alastair Morton) The local services.

  249. Yes. If you are talking about the local services in the conurbations, they are left to the end as far as we can see. Is there going to be enough track capacity? Is there going to be enough money to enable the enhancements to be made?
  (Sir Alastair Morton) It is a fair comment. We have South Central as one of our first. We have Chiltern. They both have into-town and in-town services. We are engaged with South West likewise and Central, which is the local service for Birmingham. They are all up on the block already. Thameslink has been put forward. We are already busy with the local in-town services of big conurbations. The one which has not begun yet is the local services in what we will call the Northern franchise where there are services into smaller towns in the PTE areas, because we are consulting the PTEs pretty exhaustively.

Mr Bennett

  250. When will that be finished?
  (Mr Grant) Next year.

  251. Next year is quite long. Beginning or the end of the year?
  (Mr Grant) We are discussing with the PTEs at the moment and that consultation will drive when we actually start the process. The process overall, as it is happening at the moment, to heads of terms is taking in the region of about six months, but the consultation with PTEs is an important aspect and we shall not be cutting that short. There will be quite a bit of discussion with the Northern franchise because there are five PTEs in that area.


  252. Did Railtrack miss the opportunity in their rail management statement to state a long-term vision for rail freight growth?

  (Sir Alastair Morton) In our view they may reasonably feel they took a stab at it but it was a rather incomplete stab at it. It is reasonable in future that we should bring out our views in the autumn as we plan to do and that we should take the lead, if that is what the principal funder is after. Then they, Railtrack, will prioritise within our programme to produce it. In other words, they could reasonably say they would like to have more guidance from the SRA strategic plan in the preparation of their own NMS.

  253. Is it going to be necessary to alter the current track access charging system to incentivise Railtrack and the train operating companies?
  (Sir Alastair Morton) Ministers have said that they think there should be incentives. We believe that incentives can work well. Incentives come in two kinds: they come as carrots as well as sticks. At the end of the day it is part of the Regulator's brief to work out exactly what they should be. We can say yes, we think it is a good idea, to the Regulator. We can engage in debate if he wishes on some useful ideas; we are there to talk to, as it were.

  Chairman: Thank you very much, Sir Alastair; you have been very tolerant. Thank you for coming. Doubtless we shall talk to you again and we look forward to your impressionistic view of what is happening. Thank you very much.

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