Examination of Witnesses (Questions 686
WEDNESDAY 29 NOVEMBER 2000
686. Good afternoon to you, Sir Alastair. Thank
you very much for joining us this afternoon. Would you be kind
enough to identify yourself and your colleague.
(Sir Alastair Morton) Alastair Morton.
I am Chairman of the Shadow Strategic Rail Authority. My colleague,
Mike Grant, is Chief Executive of the Shadow Strategic Rail Authority.
687. Do you have any opening remarks which you
wish to make?
(Sir Alastair Morton) No, thank you. We put a note
in and we will be happy to answer your questions.
688. What qualities are the Government or the
Shadow Strategic Rail Authority looking for in a new chairman
(Sir Alastair Morton) The most important thing to
say is that Railtrack being in the private sector, its chairman
will be chosen by its Board and ratified by its shareholders in
due course. Our concernand we see the chairman as a very
important appointment to deliver this concernis that Railtrack
be fit for purpose, not so much to get over the current crisis
because the new chairman will not be there for that, but to deliver
the ten-year plan which is going to be a heavy task, when you
add a lot of major renewal and enhancement to the already heavy
burden of operations and maintenance. He has to lead the way in
ensuring that Railtrack has the people resources and, so far as
possible, the financial resources to take on a very big task.
689. Are you going to have any influence? Have
you discussed with the rest of the Board? We all understand it
is in the private sector but have you been asked for an opinion
about the sort of person you think would be suitable for the job?
(Sir Alastair Morton) As you would expect, the Board
has thought it a good idea to see whether I would express views,
such as I have just expressed, and to go beyond that into some
of the tasks that we ourselves are sharing; for example, heavy
capital investment project preparation. We will be sharing that
with them. They thought it a good idea to ask my opinion. I have
had meetings with the non-executive directors and, in particular,
with the Chairman of their Nominations Committee, which is the
normal corporate body within a board that pursues matters like
690. Without giving away any secrets, have you
nominated anybody or given them a short list of people whom you
think would be suitable?
(Sir Alastair Morton) No, I have not, but they will
certainly wish to keep talking to me about possible candidates
as they emerge. That does not give me a veto or a control. It
is simply an opinion.
691. Did they ask you for your opinion about
the split between engineering and administration or the other
functions of Railtrack?
(Sir Alastair Morton) No, not specifically. Our conversation
ranged pretty widely. I would be happy to say that at the end
of my conversation with the non-executive directors they do have
a clear understanding of how big I see the task to be, certainly
including things such as you mentioned, engineering, and a general
putting together of the company business. Railtrack is a business
that has been reorganised several times in the course of privatisation
and even since. I think they are sensitive, as they should be,
and I am sensitive to their sensitivity, (let me put it that way),
that you cannot keep chopping and changing. You have got to think
it through and then do it, make it stick and make it work. I hope
very much to support them in that.
692. Do you think Railtrack has the confidence
of the Government?
(Sir Alastair Morton) Railtrack is the only game in
town, Madam Chair. Investment is the core of the development of
the railway we want to have, as opposed to the railway we do have.
Obviously efficient maintenance and operation is the core of the
railway we have. It belongs to Railtrack. Unless you are proposing
re-nationalisationand I am notyou say we have got
to have a Railtrack that is fit for purpose, we have got to work
with Railtrack. That is two statements. We have also to partner
Railtrack, financially as well as practically, in getting from
here to there.
693. So you would say that the Shadow Strategic
Rail Authority has confidence in Railtrack? Presumably, you would
not offer to work with them if you were not confident of their
ability to deliver what they are supposed to be delivering.
(Sir Alastair Morton) I think you are jumping to the
extreme end of the logic sequence.
694. No, I am asking, for once in my life.
(Sir Alastair Morton) Well, Railtrack in the last
resort, if Railtrack consistently failed every test put upon them
and every test to which it was put, either by the Regulator or
by us or by anyone, its customers above all, then you might start
saying, "Should they continue to have this monopoly licence
to operate the infrastructure?" But that is the nuclear question.
695. But you do not think we have got anywhere
near that yet?
(Sir Alastair Morton) I do not think we need to be
anywhere near that. I do not think we should consider ourselves
to be near it but I do think we do consider ourselves as watching
Railtrack grapple with a very, very big and difficult task, yes.
696. I understand that, Sir Alastair, and I
am not trying to be difficult, but I think the hazard is that
this is an organisation which is a core of the entire system.
If it breaks down, or if for any reason it is not performing the
function that it is supposed to perform, then not only Parliament
but every traveller who uses it is going to be very disturbed.
Really what I am asking you islet me put it very preciselyare
you confident that Railtrack can perform the task that it is inevitably
being set, at the present time, with its existing board of directors,
with the existing organisation that it has; and are you, therefore,
prepared to give it total confidence and work with it on that
(Sir Alastair Morton) No, I am prepared to give it
very strong support in moving from where it is to where we would
all like it to be and they, themselves, would like to be. It is
a statement that they have just changed their top management.
You cannot form a view of the changes being made by the new management
in just hours or days. You have to be close to them for at least
a reasonable period of time and it will be a sad business if one
says at the end of that, "We need more changes." It
is also a statement, such as has already been made between us,
that there is going to be a new chairman. He will have the task,
with whatever revised board of directors, of taking a view: has
he got the right top management or not? That is not going to be
for quite a few months to come. That is a practical fact. Therefore,
in those intervening months, what are our alternatives collectively?
The answer is to work with the Railtrack we have and to support
its efforts to do better.
697. Okay. Now before I ask anyone else, just
one other thing then. During that period of time, would you expect
to evaluate the work of Railtrack?
(Sir Alastair Morton) I expect that we will be close
to Railtrack. There is no conflict about that. We will be well
placed to observe what I hope will be a gathering momentum, not
just on the immediate crisis which needs it, but also on improving
the way they go about their task, whether it gets to be really
good or not by improving it, and finally on preparing to deliver
the ten-year plan in its various forms.
698. Sir Alastair, you have said in your responses
that Railtrack are the "only game in town". Railtrack
know that as well as anybody, do they not?
(Sir Alastair Morton) It is reasonable, yes.
699. Therefore, do you think that there is any
validity in the argument that says that the Government have decided
to make available through grant, considerable amounts of public
money to Railtrack through the Regulator for the West Coast Main
Line, which I will talk about in a moment, because the Government
have shied away from the only real sanction they have, and that
is to take their licence away.
(Sir Alastair Morton) The quantity of money going
to Railtrack was determined by the Regulator. The delivery of
that money is from us. I hold the view, for what it is worth,
that we do have a very considerable interest in knowing that it
is going to be well used and that Railtrack is fit for purpose
to use it, to do what needs to be done with the money.