Examination of Witnesses (Questions 184-199)|
WEDNESDAY 24 OCTOBER 2001
R KILEY AND
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) 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
(Mr Kiley) You mean, as a general proposition beyond
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.
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
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
194. But that is for London; what about the
(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
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.
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
(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.
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.