Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 184-199)



  Chairman: Good afternoon, gentlemen. I wonder if I can crave your indulgence just for two seconds for a little bit of Committee housekeeping. At the beginning of the session I think it is important that Members should declare any relevant interests, and I should like it to be recorded that I am a member of the Rail, Maritime and Transport trade union.

  Mr Donohoe: I declare that I am a member of the Transport and General Workers' Union.

  Mrs Ellman: I am a member of the Transport and General Workers' Union.

  Miss McIntosh: I have my shareholdings in Railtrack, FirstGroup and Eurotunnel.

  Mr Stevenson: A member of the Transport and General Workers' Union.


  184. Thank you, ladies and gentlemen. Can I greet you most warmly and say how very nice it is to see you both here, and ask you to identify yourselves?

  (Mr Kiley) Thank you, Madam Chair. I am delighted to have been invited and to be here. My name is Bob Kiley, I am the Commissioner for Transport in London. I am joined here by my associate Ian Brown, who works for Transport for London as the Managing Director of Rail Services.

  185. Do you have anything you wanted to say, Mr Kiley?
  (Mr Kiley) There are two things I would like to say, Madam Chair. First of all, I owe you and the members of your Committee an apology for a newspaper article, actually there were three of them, that appeared on Monday morning that attributed some of the content of the article essentially to the evidence that was given to you in writing some time ago. And in an excess of zeal the person being interviewed did draw upon a very early draft of that evidence, in an interview that otherwise had nothing to do with the work of this Committee. But I do extend my apologies, I know that this was a violation of protocol.

  186. Mr Kiley, normally we have our ex-colonial cousins hanged, drawn and quartered and put on Tower Hill; but in this instance, since you have apologised, both in writing and personally, we are prepared to accept your apology.
  (Mr Kiley) That is certainly an incentive not to repeat the mistake a second time, Madam Chair. The other thing I would like to say is, just briefly, what it was that our evidence was driving at, and that is that London does require, as does the whole network, very dramatic improvements to and an extension of the rail services that we currently have. Our view is that franchising can work, provided that it is against the background of very clear specifications of what is required and that franchises are extremely closely managed, as is the case, for example, with the Docklands Light Railway, which is our one and only franchise operation right now. I think most people would agree that it has got the most outstanding performance of any railway in the country at the moment. Finally, our view is, and I realise that there is a fair amount of disarray at the moment and uncertainty about the future, and therefore I hesitate to plunge into any water deeper than my ankles, but I think it will be important, as we work our way through this problem, that London, through Transport for London, will have an important role to play, a decisive role to play, in the specification of what the commuter service profile should be and of its management, along with a real management role in the major renewals that we know the commuter network is going to require if it is to be successful.

  187. In that case, let me ask you, are you confident that the Government's proposals for a company limited by guarantee is the best model?
  (Mr Kiley) I think it is a model worth exploring, and, I must say, that, for my part, I am glad that a decision was made about Railtrack, even a less than perfect decision has been better than no decision at all. I am just becoming familiar with companies limited by guarantee. There may be some promise in this model, but one thing about the model which was not emphasised yesterday in the presentation on the House floor was that risk must still be retained by the private entity. So there will still be that tension between the risk that goes with financial responsibility, on the one side, and the operating responsibility, on the other side. So how that interface between this new creature and the Train Operating Companies is designed will be critical to, at least from an operating standpoint, the success in the future. And I think that the people at DTLR would be the first to say that that is a sensitive issue. I do not think we have a final product yet, but I, for one, believe that this is definitely worth exploring. I do not know of a better model at the moment.

  188. What implications do you think it has for franchising generally?
  (Mr Kiley) You mean, as a general proposition beyond rail?

  189. No; the relationship of Railtrack and the Train Operating Companies?
  (Mr Kiley) The company limited by guarantee need not itself drive the way in which franchising is organised or is done, that can be done along a parallel track; it obviously should be done. My own view is that there needs to be overtime consolidation on the rail network.

  190. From what to what?
  (Mr Kiley) I think the idea of re-examining regional sectioning is overdue; the business itself may require some consolidation, as we move ahead, these are private companies, there is not much that those of us in the public sector can do about that. But there are 12 separate franchises currently delivering commuter service to London; that is ungainly, that is very, very difficult to manage. So my view is that the length of the franchises and the content of the franchises should be driven by the design of the network that we think is desirable, not the other way around.

  191. Including modernisation; are you talking about including an extension of the existing network?
  (Mr Kiley) I am thinking in the main of the way the network now exists, but obviously major renewals, which will increase capacity and journey time, will have an effect on how we design the franchises, and obviously extensions, new projects, clearly will have an impact on how we do these things. And, as I understand it, it is the desire of the Government to continue to do the enhancement, the new projects, through Special Purpose Vehicles, and not to get that tangled up into whatever emerges from the debris of Railtrack.

Andrew Bennett

  192. If 12 is too many, what is the right number?
  (Mr Kiley) Frankly, if I had my druthers, the right number would be as little as one, and not many more than several. If you look at some of our sister cities, ones that have invested heavily in rail, I am thinking here, in Europe, of Paris and Berlin, for example, in Asia, Tokyo, Hong Kong, in the United States, New York and Chicago, you will see some organisational differences when it comes to commuter rail service, but all of them have metro service, and none has anything like 12 separate Train Operating Companies. Most of them will have one, or perhaps two, or, at most, in the case of Tokyo, three major operations; you get beyond that, frankly, and I think you have got the beginnings of a management nightmare.

Mr O'Brien

  193. If I could continue with the question of Railtrack, and having noted your comments in the past on the future of Railtrack, what would be the advantage of Railtrack's successor being divided into a number of regional infrastructures owning and operating those companies?
  (Mr Kiley) Obviously, the devil will always be in the detail. It is easy for me to make general statements, I acknowledge that, and a lot of work will have to be done before you could conclude that regionalisation is the solution. But, looking at it from strictly a London standpoint, the idea of being able to have common service standards, common ticketing, common marketing, common branding, if you will, so that a passenger anywhere within the London region would recognise a train because it will be similar and can count on similar services, tickets that can be used across what are now franchise Train Operating Company lines, I think that would be a dramatic jump forward from where we are right now.

  194. But that is for London; what about the other regions?
  (Mr Kiley) I am still getting acquainted with London, so I cannot pretend any expertise about other metropolitan areas.

  195. But you are on record as saying that, in your opinion, you thought that the regions, operating Railtrack and a lot of companies, would be the best way forward?
  (Mr Kiley) Well, I do know that there are other metropolitan areas, Passenger Transport Executives, that are positioned to do something similar to what I am proposing here for London. There will still be a need, obviously, for long-distance train franchises and oversight, there may, in fact, be room for very, very high-speed, inter-urban services that could be separate from commuter services; there are many different ways of thinking about this. And now is the time, because we have come to this sorry pass, that we should be using our imagination about what might work for the future.

  196. What potential is there for the closer integration then of the national rail and London Underground networks?
  (Mr Kiley) I think, under this scheme that I am proposing, we enhance the opportunities for true integration within Greater London itself. For example, of all the rush hour trips in the tube, almost 60 per cent of them originate with a train, somewhere within and even outside of the region. So it makes incredibly good sense that there be, at some level, one entity that is overseeing that interface, so that you get good information to passengers about delays and the availability of service at the major interchanges within London itself, both coming in, in the morning, and going out, in the evening. I just think it opens up the ticketing opportunities. We are very close now, as you probably know, to being able to introduce the next generation of fare technology, called the Smart Card; and at the moment our ability to extend is being developed within Transport for London and the Underground, it is one of the few things that we are doing jointly right now. Our ability to extend this to the Train Operating Companies has been limited up until now; and, at a minimum, it would be very important to be able to introduce this to the commuter service passengers at the same time, or very close to the point where we are introducing it for users of the tube and London buses, which is probably a year to 16 months away from now.

  197. Who would regulate it then; in your opinion, who would be the best regulator?
  (Mr Kiley) For all of us; well, there needs to be, I think, pretty fierce regulation, particularly on the safety side. That cannot ever disappear from number one on our list of priorities. I do not know whether this should continue to be reposed in the Rail Regulator, with a mission that reflects the organisational changes that are bound to occur over the coming months. I have seen proposals to integrate some of what SRA does now with the regulatory function. In the end, I think, for regulation to work it needs to be pretty simple, very transparent, everyone has to know what is expected of them, and in the end the best kind of regulators are the people who are also very good managers and who have had some experience with the animal that is being regulated.

  Chairman: You are rather cruel to talk about the need for good managers, Mr Kiley; that is coming a little too close to home.

Miss McIntosh

  198. You mentioned the improvements that you wish to deliver to the Underground; how important do you think that private managers and private investors are in delivering those improvements?
  (Mr Kiley) To the Underground; absolutely crucial to renewal of the Underground's physical plant, as we know it now, and critical to any extensions of Underground service. Everywhere that I have been as a manager I have relied very heavily on private expertise, both finance and construction management. I think it is reasonably well known that I am not a great supporter of PPP, I think PPP has just gotten that mix utterly wrong. Rail operations, in particular, have a special public attribute, they truly do belong in the public realm, and almost everywhere in the world where serious passenger rail operations are undertaken there is a clear, transparent, public responsibility. I know this is not the place to get into PPP, but my concern in that area has been for the obfuscation of accountability and the separation of operations into track, on the one side, and train driving, on the other side.

  Miss McIntosh: I do not intend to go down the path of PPP.

  Chairman: No, I hope not. Mr Kiley might have something to say about that on another occasion.

Miss McIntosh

  199. But can I just ask, following the entry into administration of Railtrack, how easy do you think it is going to be both to attract private management and private investment into London Underground?
  (Mr Kiley) I think, at the end of the day, whenever that is, I have seen time-frames that range anywhere from three months to a year, and it would not surprise me if it were towards the outer end of that range to get it right. There may be only one more chance to get this right and we should take full advantage of it now. I think, if we do get it right, and it is very clear what the accountability structures are and what is expected of management, there will be no trouble in attracting good management, to whatever the entity or entities are that are doing this. If we make it complicated and if accountability for actual service is not clear, it will be near impossible to get the kind of management that will be needed to perform the rescue operation, and I worry a lot about this in the case of the tube as well.

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