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

Examination of Witness (Questions 280 - 299)



  280. If you got agreement, when would they start?
  (Mr Winsor) First of April 2001. I think I mentioned earlier that I am also establishing an asset register in relation to the capability, capacity and—


  281. You are establishing it?
  (Mr Winsor) Yes. Sorry, I am requiring Railtrack to establish this asset register.

  282. Are you giving them a timetable?
  (Mr Winsor) Yes.

  283. Is it a nice short timetable?
  (Mr Winsor) I have to agree the timetable with them and if they refuse to agree to a timetable with which I am satisfied, then I shall obtain the timetable using compulsory means.

Mr Donohoe

  284. Do you have access to that or will you?
  (Mr Winsor) If I may put it this way, virtually everybody but a train spotter is going to have access to this database once it is established. It is going to be available to Railtrack itself, its contractors, its prospective contractors, rolling stock manufacturers, consultants, train operators, regulatory authorities, just about everybody who has a legitimate public interest in it.


  285. That includes us of course. Remember us.
  (Mr Winsor) I expect, as a regulatory authority of a kind, perhaps of the supreme kind, that you will have access to it as well.

  Chairman: I like that rapid recovery. I can see you are going to do well.

Mr Stevenson

  286. May I start with the West Coast Main Line? Given the recent announcement by Virgin Trains that they are considering taking court action against Railtrack, are you satisfied that Railtrack will meet its obligations on the West Coast Main Line improvements to Virgin and to other users?
  (Mr Winsor) No.

  287. Would you care to elaborate the reasons why you have come to that conclusion?
  (Mr Winsor) The West Coast Main Line upgrade is a project which has been in quite considerable difficulty, some trouble. Railtrack has pretty much lost two years and is now trying very hard and running very fast in order to catch up the lost time. I believe that it will catch up the lost time in relation to phase one, which contemplates 125mph operation by May 2002. However, Railtrack has published in its annual report, that it may regard phase two of the project, which is 140mph operation by May 2005, as not the right solution for the industry and therefore they may seek to renegotiate the deal with Virgin. Virgin has an existing deal and Virgin expects the contract it has to be honoured in full by Railtrack and indeed that is what this morning's papers say.

  288. I should like to ask you a question about phase two, if I might, because we are advised that the modernisation project has risen in cost from £2.3 billion to £5.85 billion. In evidence to us Gerald Corbett said that the main reason for that was the decision by Railtrack to move away from the moving block signalling and to go to another system which was more expensive. Given that is phase two, given that clearly if those additional costs are anything like accurate, presumably that could have some effect on your deliberation for access charges.
  (Mr Winsor) Yes; it is going to.

  289. I am glad you confirmed that. That being the case, were you consulted or were you advised in any way, shape or form, about this decision which Railtrack took that has, according to Gerald Corbett, accounted for the majority of the increase in the costs?
  (Mr Winsor) Yes.

  290. You were. Did you approve it?
  (Mr Winsor) No, I did not require to approve it. They informed me that they had made a decision, that the moving block signalling system was a technology too far and it was far safer to go for conventional signalling. This was going to increase the costs very substantially. They told us it would increase the costs from £2.2 to £5.85 billion. That is not a decision for them to make.

  291. So you were effectively told that they had taken this decision.
  (Mr Winsor) I was told they had taken the decision to change the technology. I was told what they thought the costs of that change would be.

  292. That is fine.
  (Mr Winsor) The decision as to what the costs of that change will be is mine.

  293. I understand that. Nevertheless, you will appreciate that Members have to take evidence on its face value and this is the evidence we have had from Railtrack, so I need to pursue this a little, if I might?
  (Mr Winsor) Yes.

  294. You were told about it. It is not for you to approve or otherwise. Did you comment on it?
  (Mr Winsor) Yes.

  295. Are you able to advise the Committee what those comments were?
  (Mr Winsor) I thought it was a remarkable increase in the costs and that we would be looking at the costs extremely carefully. For the last several months we have been subjecting Railtrack's projected costs to very detailed and thorough scrutiny. I announced provisional conclusions in relation to the maintenance and renewal element of the West Coast Main Line on 20 June 2000 and I shall announce my conclusions in relation to the enhancements at the end of this month.

  296. Do you think it is satisfactory that significant decisions were taken by Railtrack in particular which have a dramatic effect on the costs of particularly large-scale projects which could flow through into access charges or other charges—it could be on the public purse—without your office having some say in whether or not those projects, as they are put by Railtrack, are in fact the right thing to do?
  (Mr Winsor) I do have a say, because Railtrack under Condition 7 of its network licence is obliged to enhance the network in accordance with best practice in a timely, efficient and economical manner. If I believe that Railtrack are not doing that then I can require them to stop and take a different course of action.

  297. May I now move to the comment you made about access charges when you finally reach your determinations and set them? I think I paraphrase only slightly that you said that once you have done that it is up to the Strategic Rail Authority to buy into the system based on those charges. What do you mean by that?
  (Mr Winsor) I think I said it is up to the Strategic Rail Authority to decide what they want to buy. The process of the periodic review is that I have to assess what it will cost Railtrack to maintain and renew the network in the next five years. The Franchising Director entered into a number of contracts in 1995-96-97, which obliged him to pay whatever I decide the costs of maintenance and renewal of the network will be at the next periodic review. However, in relation to enhancements of the network—and a lot of discussion has taken place this afternoon about new capacity and whether there is going to be enough for freight and questions of that kind—it is a matter for the Strategic Rail Authority to decide whether they regard the prices . . . Railtrack will set out a menu, we shall check that everything which ought to be on the menu is on the menu, I shall attach prices to it and Sir Alastair Morton and Mr Grant will decide what they want to buy. That is in relation to enhancements.

  298. That is very concise and helpful. When you are setting your access charges—and I fully appreciate your initial statement—given that it is now apparently accepted that investment in our railways will come from a number of sources, Railtrack, the private sector, access charges and public money, do you accept that there will be a need for significant amounts of public money in these investment plans? If that is the case, do you take that into account when you are considering your access charges regime?
  (Mr Winsor) I do agree that there will be a need for significant amounts of public money and we are going to hear quite shortly how much money the Government are going to decide is going to be provided. That is especially true for freight because the economics of freight are very different from the economics of passenger services. The Strategic Rail Authority will have to decide how much of the public money they have in their bank account they are prepared to use in order to fund new capacity for freight. That is a decision for them because it is a strategic decision and that is what they do. They are the buyers of services, they are the users of public money, they make those key decisions, that is once I have worked out how much a fair and efficient, a competent infrastructure operator would charge for that capacity.

  299. I think you have said in answer to my question no, you do not take any involvement of public money in your considerations.
  (Mr Winsor) I think you are right.

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