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

Examination of Witnesses (Questions 200-219)




  200. Is that one of the things you have high on your list of priorities?
  (Mr Gisby) It is high on the SRA's list and we shall do as we are told.

Mr Donohoe

  201. What difference has it made to the company being in administration in terms of the capital programme?
  (Mr Armitt) I would not say it has made any difference.

  202. It has made no difference at all.
  (Mr Armitt) No, because we have not been constrained in carrying out the work which we had in our capital programme during the period of the administration.

  203. So the Government is continuing to fund.
  (Mr Armitt) Yes.

  204. Can you tell me whether or not the successor company which has been proposed, Network Rail, is a certain successor to Railtrack?
  (Mr Armitt) At the moment it is the only option.

  205. So there is always a possibility of another company coming and making a bid.
  (Mr Armitt) I observe the process from the outside. We are very close with Network Rail in its discussions with all the parties, Railtrack Group, the SRA are involved, the Government are involved. We are very close to reaching an agreement. I should be very surprised if at this stage anybody else appeared.

  206. Do you think that is ensuring the good value for public investment?
  (Mr Armitt) A decision was made by Ministers to put Railtrack into administration. We now have to get Railtrack out of administration. How that is achieved, the method of financing that, the amount of money which is paid to take Railtrack out of administration is not a matter for us as the current management of Railtrack and it is not for us to decide whether the costs and the value associated with that are bad or indifferent.

  207. When do you expect it will come out of administration?
  (Mr Armitt) Others have said regularly that the target is the end of July/early August and that is the earliest which we could expect to see anything happen. The final approvals which have to be given are the state aid approvals from Brussels. I am sure the Department would tell you at the moment that the target is still early August. Until it happens it has not happened.


  208. May I come back to your own direct responsibilities? Do you feel constrained by a lack of engineering or signalling staff?
  (Mr Armitt) At the moment we should like to have more than the number of engineers we have and we are recruiting more and we have plans to recruit a couple of hundred more across the whole of the network.

  209. Do you intend therefore to use them directly or do you intend to continue to use the contractor system? What are your plans?
  (Mr Armitt) I expect us to continue to use contractors to carry out the physical works on the network. We are in discussion with contractors and we are reviewing the extent of the inspection, the decision-making about what should be done, when it should be done. We intend to take over more responsibility for that from the contractors. To do that we will need more staff and we will get some of those staff back from those who are currently working for the contractors who were "TUPE'd" across to the contractors at the time of privatisation.

  210. Forgive me, I do not want to nit pick, but there is quite a fundamental difference between taking back not only large amounts of the work which is at present done by contractors, but also monitoring the work which continues to be done by contractors.
  (Mr Armitt) Yes.

  211. Have you taken a value judgement that in future Railtrack, or Railtrack's successor—I realise you cannot bind a successor company—will expect to do much more of the maintenance and upgrade work itself directly or have you drawn a line between those things which you would expect contractors to do and if so what have you done it on, what are the bases of those decisions?
  (Mr Armitt) At the moment we do not expect physically to carry out directly the maintenance or the renewal work on the network.

  212. So you intend to continue with the existing system but what you are saying to us is that you will bring in better monitoring and you will also expect to have far more directly employed engineers who will be able to give an assessment of what others are doing.
  (Mr Armitt) Correct.

  213. Is that what you are telling us?
  (Mr Armitt) That is exactly what I am telling you.

  214. How soon will it be before you are satisfied that you have sufficient people capable of carrying out that task?
  (Mr Armitt) The extent of the task and the degree to which we rely on external recruitment or because some of those duties are currently carried out by the contractor and if we were to carry out those duties we would simply bring those people back from the contractors, or we would enter into an arrangement with the contractors whereby we had control of them—

  215. You see, we are not just interested in a moving of the pawns around the board, but a very clear demonstration from you that you have taken this problem on board and understand that the public are really quite disquieted about this entire use of contractors still.
  (Mr Armitt) We have discussed this at length and our current view is that it would not be the right decision for Railtrack to take back and carry out direct maintenance or direct renewal work with its own directly employed labour force.

  216. Because of cost?
  (Mr Armitt) It would be a massive upheaval quite frankly. The skills to carry that work out are fundamentally lying in the contractor organisations. Therefore we believe that the best thing to do is to have a range of contractors who make their business one of carrying out efficient and effective work on the network. What we want to do is make sure that we have a firm grip of the engineering decisions, so we will set the standards, we will set the inspection regime, we will interpret the inspection regime, we may well carry out more inspection ourselves and we will make the decisions in clear and simple terms on what gets done and when it gets done.

  217. Without being cruel about your predecessors, there will be an advance. There have been discussions with several of our witnesses about the reluctance of Railtrack to come to any kind of negotiated completion with the Train Operating Companies or with the PTEs about specific schemes and the West Coast Mainline is one of them. When do you expect to come to a conclusion on those particular discussions?
  (Mr Armitt) The West Coast Mainline has now had detailed discussions going on between us, the SRA and the train operators for several months. The fact that they have been held in the way they have been held for several months has done nothing but good for the overall outcome on the West Coast because everybody is talking in a very open way to one another and the issues are being addressed in a very constructive way between the parties.

  218. Do you think it is going to take a lot longer to reach some kind of working agreement?
  (Mr Armitt) No, I would expect us to be reaching a conclusion in the next, if I am sensible about this, two to three months.

Mr Bennett

  219. If you are going to send us a note about Sheffield and Doncaster and the overruns, what about a note also about Ashton-under-Lyne and why that is taking so long to negotiate? On this question of timetabling that you were talking about, we heard earlier from Mr Green that he thought if there were really some pushing and banging of heads together at Manchester Piccadilly, we could get some more capacity out of it without actually making changes. You get access charges, do you not, for each of the services which is provided? So you have a vested interest in getting a bit more capacity through Manchester Piccadilly. When are we going to get that extra capacity?
  (Mr Armitt) We have an interest in getting the maximum out of the network. We also have an interest in ensuring that we do not try to stuff too much into the network so that it makes it that we are less able to run a reliable service and then we pay penalties when we do not run a reliable service. So on the one hand we get benefits by receiving access charges. On the other hand, to the extent that we then have a congested network, which we cannot run reliably, we pay penalties. So we seek a balance.

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