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

Examination of Witness (Questions 270-295)



  280. But you are not familiar with a business case for it?
  (Mr Kiley) I do not know why seven and a half was chosen instead of five or ten, maybe it is because it lies between five and ten; but I do not think it was more complex than that.

  281. Okay; plucked out of thin air. On the issue of extensions, the contract, clearly, at one stage, tended to be quite firm, and then I understand that any major extensions that may be required fall upon Transport for London; is that the case, under the PPP? If there is further work needing to be done outside the contract, further development of the underground system that falls outside of the terms of the PPP, then I think the ball falls back in your court, does it not?
  (Mr Kiley) It does, but the Infracos will still be very much involved in that, and in as much as the consortia will control the infrastructure companies for 30 years, so any enhancements or improvements that require collaboration or priorities being, shall we say, established by the Infracos, it is sort of a roll of the dice. I am not saying that they are going to be doing the projects, but we are going to have to be working cheek by jowl with them, with, for example, enhancements or extensions of transit lines, because it will be in their territory.

  282. And have you had any discussions with the Government about how these will be financed, further extensions?
  (Mr Kiley) There are ongoing discussions with the Government about financing of enhancements and extensions, yes; Crossrail is one example of that, the East London Line.

  283. Looking at the prospectus for the PPP, there are various claims being made, I just really want to ask you whether you think the business plan you have got will match them, and a yes or no will really do?
  (Mr Kiley) Yes.

  284. All of them?
  (Mr Kiley) Yes.

Mr O'Brien

  285. Mr Kiley, in answering an earlier question from the Chair, you did say that when the question was, if PPP fails, how long would it take to put your management plan and financing into place, and I think you said between two and four months?
  (Mr Kiley) Yes, if PPP does not happen, for whatever reason, then I would say we would have a management team in place, it will not be thoroughly fleshed out, within three or four months, and we will be in a position, at least on rolling-stock, to begin the procurement process, assuming there are resources for it, almost immediately. But we would also commence immediately, in week one, the thorough-going assessment of the physical plant, particularly those so-called grey assets that have not really been assessed at all in the recent past.

  286. The answer you gave to the Chairman you are repeating now. My question to you is, how do you envisage that PPP will not go ahead, because the inference is that, well, there is no alternative; how can you do it?
  (Mr Kiley) My belief is that PPP does not meet and will not meet the value for money test and will not pass the safety test, and that it is, basically, fundamentally unmanageable, it is a freak of nature.

  287. So what you are saying then is that, from your point of view, and because of the research that you have undertaken, you are advising the Committee today that you consider PPP will not go ahead; is that right?
  (Mr Kiley) I am not the one who makes the decision, so I cannot really make that statement. All I can say is that I do not believe that it is fit to go forward, by the Government's own tests and standards.

  288. Let me put it another way then. If you are of the opinion that PPP will not be in the best interests of passengers or for the underground system, what are you prepared to do to make sure that the passengers' safety and the London Underground system come first?
  (Mr Kiley) I will use every breath left in me to keep making this case, during the period when the decision is going to be made, hoping, praying, that the Government decides not to go forward.

  289. Have you any allies to that, is there any other evidence that will substantiate what you are saying this afternoon?
  (Mr Kiley) I think the riding public all oppose it, overwhelmingly, in London, the people who watch this in London, London itself, the business community; almost everywhere I have gone there is an overwhelming resistance to PPP. There was a poll that I read about in the newspaper last week, 7 per cent of those polled were supporting PPP and between 40 and 50 per cent wanted it stopped, immediately, and I think the opposition to this in London is overwhelming. That is not just among users and citizens but among experts and people who have looked at this plan; there are times when I am not sure that there are many people in the Government who really support this, you do not hear ringing defences.

Mr Bennett

  290. Is a half and half solution possible, with Transport for London running one part of it and an Infraco concession running the other half?
  (Mr Kiley) My honest reaction to that is that that is really an inane notion. Either PPP is solid and works, or it does not. To begin to suggest that maybe one will be held back because it fails this test or that, I think that is a sign of desperation. PPP either goes and makes the case as a coherent concept, or it does not; if you scrape the barnacles off a third of it and then try to throw it over the transom to the public sector, it is just going to make a worse mess than already exists.

  291. Do you have full confidence in the Health and Safety Executive on the safety case?
  (Mr Kiley) I have met with the Health and Safety Executive recently, and this was an extensive meeting, and I think they are treating this with the utmost seriousness. They are very clear that they are going to take all the time that they believe they need to finish this off, and I think they know that the world will be watching this, so I believe that they are going to give us their best professional undertaking.

  292. And how fed-up are you with the whole process? I could imagine that you would almost feel, well, you might as well walk away from it?
  (Mr Kiley) No, I do not feel that way at all. The democratic process is wending its way forward, and I could not have survived in Boston and New York if I had been impatient about politics, because those can be pretty brutal cities as well. It is the price we pay for having the kind of country that we have, which is generally wonderful; but we got this one wrong, and I hope, eventually, the democratic process will work its way forward and we will all see the wisdom of moving away from PPP.

  293. Can you finish with any good news; the East London Line, Crossrail, the Hackney-South West Line, is it making any progress?
  (Mr Kiley) We have formed a company, joint venture, between the Strategic Rail Authority and ourselves, that will move both Crossrail and Chelsea/Hackney forward. The East London Line Extension, where we are working in collaboration with the London Underground, has already begun construction. We had resource problems, serious resource problems, with each of those projects. I think we can probably come up with creative solutions for financing Crossrail, if the more ambitious configuration is accepted; but for the East London Lines, we are going to need help from some quarter, namely the central government, for that project to continue, and this is an example of one that we are building on an annualised basis, and it makes me very uncomfortable. There is not a commitment yet to the overall financing of this programme, and it is urgently needed, and I hope it will come early in this next fiscal year.

Chris Grayling

  294. Is it now, with all the delays that have taken place, with all the mechanics that we still have to go through to get PPP decided one way or the other, if we look through the next five years, in five years' time, is it actually possible now to deliver noticeable improvements to the tube service?
  (Mr Kiley) I think, under the best of circumstances, given the task ahead, that it will be four, five, maybe as many as six years before there is perceptible improvement on a wide scale. It will begin to emerge, if we get it right from the beginning, after 18 months, two years, but it will be in pockets, and it will be by no means system-wide; but, certainly, by the end of, let us say, a seven and a half year period, which is the number we are working with right now, you should expect to see very substantial improvements. When you get to the three- to five-year mark, if you are doing it well, you develop a kind of momentum that gathers itself, and you have got the self-confidence, the experience base, the resources have been invested, and it really does gather significant force. And I just speak from my New York experience, which was seven years, just a little bit more than seven years, that you get to that mid point and you can just feel it lifting. But the first few years will be very, very tough, very tough, and the truth is that the public will experience a different kind of disruption, but frequently as debilitating as they experience now. Because in the big tube lines there are going to have to be line closures, station closures, to really get this work done at a rapid pace, and that is going to be very disruptive, and there will have to be great co-operation from those who are providing a bus service and the people who are running the Underground, and making sure that there is at least some minimal acceptable level of transportation, and we have to go through this, but there is no escaping it.


  295. Mr Kiley, that is very helpful. We are always grateful to you for coming to give us evidence and it is always useful. Thank you very much indeed.
  (Mr Kiley) Thank you for the opportunity, Madam Chair.

  Chairman: I have failed in my duty. I should have asked for declarations of interest. Can I have the declarations of interest, please.

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

  Mr Stevenson: Transport and General Workers' Union.

  Mrs Ellman: Transport and General Workers' Union.

  Mr O'Brien: Working Men's Club.

  Chairman: I am a member of the Rail, Maritime and Transport trade union.

  Miss McIntosh: I am a minor shareholder in Railtrack, First Group and Eurotunnel.

  Chairman: Thank you very much.

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