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

Examination of Witnesses (Questions 460 - 480)



Dr Pugh

  460. There is an ongoing programme for railway safety improvements, I hope this will take place following the period of administration. Can the administrators tell me whether there are (a) the resources and (b) the willingness to continue with that as before? Is that going to come to an abrupt halt?
  (Mr Rollings) No, not at all.

  461. The resources are there?
  (Mr Rollings) The resources are there. The funding is in place. I think it was a point made earlier on, Steve Marshall and two of his board colleagues are actually there to ensure the safety case is met. We have had a review by the Health and Safety Executive, initiated on administration, to confirm that the safety case is valid within administration .Clearly there is every effort made to ensure the safety of —

  462. Have you heard all improvements previously scheduled will go ahead?
  (Mr Rollings) Yes, I have no reason to believe why not.

Mr Donohoe

  463. Can I just ask how much private money is going into any project and did go into any project that Railtrack will be responsible for and will happen during the period of administration? How much private money is going into it?
  (Mr Bloom) I do not foresee the prospect of any private money being raised during the administration period.

  Mr Donohoe: It is all Government money.

  Chairman: It is all taxpayers' cash.

Mr Donohoe

  464. How much private money has gone into earlier projects that Railtrack had been involved

  in up until the administration?
  (Mr Marshall) If one looks backwards, up to the point of administration, clearly the equity in Railtrack, which is no more, which is why it is all now the taxpayers —

  465. Not a penny of private money?
  (Mr Marshall) If you are defining private money as the equity base of Railtrack that has absorbed obviously financial overruns, then clearly it has absorbed very significant sums.

Andrew Bennett

  466. Mr Bloom, at the beginning you said that you saw an opportunity that this presented. How do you see the structure developing then?
  (Mr Bloom) I think it is really too early to say. We have been involved for three weeks. We had to spend a very significant proportion of the first three weeks dealing with the operational issues and the day to day issues that I described earlier on. We are only really now starting to get going in looking at the way in which this thing may be structured going forward. I am really not in a position at the moment to give you developed thoughts on that. We would be happy to come back at some future stage.

  Andrew Bennett: How soon?


  467. If you have got this three to six months' deadline that you have set yourself, you could perhaps give us a note within that time?
  (Mr Bloom) Yes, indeed.

  468. May I ask you finally a very simple question. Some time ago Railtrack informed its regional offices that it intended to put more work with them and less at central Railtrack, it then, less than a week before it went into liquidation, reversed that and started to suggest that there were going to be a number of dismissals in the regional offices. What are you doing about that?
  (Mr Bloom) We have made a decision not to go ahead for the time being with any redundancy programme. We made a decision, together with the Railtrack board, not to implement a redundancy programme of any type arising from the administration on the basis that we wanted to keep confidence high.

  469. Have you made that clear to your workforce?
  (Mr Bloom) We have indeed.

Andrew Bennett

  470. You said again at the beginning that you were happy to leave the day to day management with the existing Railtrack management. Are you satisfied that some of the contractors have not been ripping Railtrack off? One or two of the contractors who seem to have taken over a lot of the maintenance seem to be making some pretty good profits. Do you think they are justified?
  (Mr Bloom) I am not really in a position to give you our view on all the maintenance contracts, there are hundreds and hundreds of maintenance contracts in position at the moment. What we are doing, whilst I say that the day to day operational management of the company rests with the board, we are in continuous dialogue with them, and to the extent that there are contracts which appear to be unfairly in favour of a contractor, clearly those would need to be reviewed next time around in order to ensure that there was a fairer balance in any future negotiations.

  Andrew Bennett: Have Railtrack completed this inventory of their resources and equipment?


  471. And assets. Have they finished, Mr Marshall?
  (Mr Marshall) If I may. On 1st October we provided the Rail Regulator with a two year plan going forward.

  472. Not a plan, Mr Marshall, remember you were asked to do a register of your assets.
  (Mr Marshall) You chopped me off in mid sentence, Madam Chairman.

  473. Forgive me. A plan and a register of your assets.
  (Mr Marshall) Let me give you an actual. By the end of this calendar year, our asset register, which is already in place and is being populated with data, will be fully populated.

  474. You mean it is not ready even though the last time you came before this Committee you said it would be?
  (Mr Marshall) I cannot recall exactly what I did say.

  475. I think we know.
  (Mr Marshall) I think it is well-known that at the end of this year our asset register will be fully populated.

Andrew Bennett

  476. With guesses or accurate information?
  (Mr Marshall) I must emphasis though—and I have been quite consistent on this—everybody thinks the existence of an asset register with data in it suddenly helps; it does not.


  477. You do not think it helps to know what you have at your disposal?
  (Mr Marshall) We already know what is at our disposal.

  478. How did you know that if you had not got your register completed?
  (Mr Marshall) Because we know what our assets our. The issue is asset condition. For those who unfortunately are picking up the risk for this business now I have to say whenever people talk about water models and so on, it will be, whoever is running the business, two to three years before there is the predictability that comes from the knowledge of asset condition that will inform forward spending plans.

  479. So you know what your assets are, you have not completed your register, but you do know the state of them, and the only thing that would concern you for any subsequent company, whatever form it was in, was that the people taking it over would not know the shape of those assets?
  (Mr Marshall) The assets we know, the condition of them we know a lot about, but that has to be systematised in the way other utilities have done.

  480. Systematised?
  (Mr Marshall) That will take two years to turn into valuable, predictive information.

  Chairman: I see. I think we can take it that all the figures you have given us have been rather similar to your estimates, they have drifted ever so slightly. Gentlemen, you have been extremely informative. Thank you very much indeed. We do wish you well.

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