Examination of Witness (Questions 80 -
99)
WEDNESDAY 6 NOVEMBER 2002
MR JIM
STEER
80. Correct me if I am wrong, but you are really
saying that poorly performing rail schemes in terms of cost benefit
hide behind really good road schemes in cost benefit terms in
the multi-modal studies. Is the implication of that that we should
go back to looking at cost benefit analysis scheme by scheme and
not have the multi-modal studies?
(Mr Steer) No, we actually have to invent something
new which enables us to take forward a package. Ministers decide
that the non-highway package is the right answer they want to
see implemented; it may have a highway element. Then we have to
find a way in which they can direct, fund, the SRA to contribute
the rail element of that if that is what ministers do see overriding
the normal criteria which we would be expected to apply in weighing
up the prioritisation of rail projects. That is not insuperable,
but it is necessary.
81. So it is just a request for more money.
(Mr Steer) It is not just a request for more money.
We would need particular guidance that ministers looking at all
the evidence do believe that even though there is a poor cost
benefit case on the face of it for the rail project, they see
wider benefits. I should have thought they might do that, provided
they believe that all of the other elements are going to be implemented
that generate the overall cost benefit case.
Mrs Ellman
82. Is there enough rail expertise in the multi-modal
studies? How would you like things changed at this point?
(Mr Steer) Rail expertise, yes, there is plenty. However,
it has been quite difficult for these studies to engage fully
with the current position on the rail network. Let me give you
an example of what has happened during the currency of the multi-modal
studies. Earlier this year the SRA announced a new policy on capacity
utilisation. It radically changes what it is possible to contemplate
doing with the existing rail network. The previous assumption
had basically been that the network is either full or there is
spare capacity and consultants will look at that and will understand
that. They might conclude, and typically they have concluded,
that they want an additional service but clearly there is no room
for it, so new infrastructure will be needed and this triggers
large sums of money. What the capacity utilisation policy does
is say, let us look at the assemblage of needs or services, let
us weigh them up, let us see whether we can re-prioritise and
get better value out of what we have. I do not believe that kind
of perspective was one which was available realistically to the
multi-modal study teams. We are forced into it in a sense, given
the high cost of enhancing the rail network and it also creates
an opportunity for us. The big distinction we would draw in saying
that we welcome the multi-modal studies—and that was not
just an idle thought—is between what the multi-modal studies
have identified in terms of the role for rail—it is very
difficult for the SRA to understand from its perspective what
is wanted in each region and sub-region; the multi-modal studies
have identified that—and the fact that they have also gone
a step further and have said that is what they need but by the
way this is how to do it. If you draw back a little to say "This
is what we should like from the rail network", then we can
engage in these wider issues which we believe are real issues,
how this bit of the network and how it gets developed fits in
with the next bit and so forth and see just how it is possible
to deliver on those objectives. We feel in many cases it will
be possible to deliver a great deal of what the multi-modal studies
wanted to see, but it may well not be through the particular schemes
which were put forward.
83. Are you saying that the multi-modal studies
are going out beyond their capability?
(Mr Steer) To give clarity of expression as to what
they were recommending they may perhaps have gone too far and
said what this would look like is chink, chink, chink, because
otherwise people would not have understood clearly what they were
after. The fact that we then have to roll that back a little bit
and analyse it and see how it is actually best to deliver that,
I hope will not disappoint those who have invested a lot of time
and money in these projects and I hope they will recognise that
is a worthwhile process towards meeting the aims they have identified.
84. Can we have confidence in the costings produced
by the studies?
(Mr Steer) Probably not, I have to say.
Chairman
85. Is that based on your experience of the
rail industry?
(Mr Steer) Indeed so.
86. Or on the assessments only?
(Mr Steer) Based on the experience of the fact that
it is extremely difficult to assess the costs of rail schemes
until you have got to a reasonable level of detailed understanding.
87. I do hope that is not the case now. I thought
we were a bit beyond that.
(Mr Steer) I am afraid that if you set up a team of
consultants and ask them to give you a view about what a particular
rail scheme will cost without the opportunity to go and interrogate—bear
in mind that Railtrack was in administration for a year and not
the most actively engaged partner to assess what would be needed
to do a particular project—I am afraid there is uncertainty
around these costs and we have established in some cases already
that the cost estimates were too low. Sometimes maybe they will
be too high, but there is a great deal of uncertainty around estimates
made in these projects.
Mrs Ellman
88. Does that then put a big question mark over
the study outcomes?
(Mr Steer) It puts a question mark over the way in
which the studies have recommended the objectives they have identified
for rail should be implemented.
89. Is that the same thing?
(Mr Steer) Only if you judge the value of the multi-modal
studies by whether the very specific schemes mentioned are implemented.
90. Are you then willing to work with the study
teams to produce the best way of getting results?
(Mr Steer) Absolutely and have been throughout. I
was very interested to hear of the implementation group which
has been set up for the Cambridge to Huntingdon multi-modal study
and that strikes me as being a very good way in which the SRA
could become involved in implementation.
91. Are you involved in that?
(Mr Steer) It does not centre on the rail network
except inasmuch as the bus way proposal makes use of a disused
railway line. The SRA has made clear what its views are on that,
which are generally supportive, subject to one or two relatively
minor points. The SRA will be involved, but it has a fairly minor
role to play.
92. Is the SRA involved in any of the other
studies in that way or does it propose to be?
(Mr Steer) We are actively involved in looking at
all of the study conclusions as they come out. We are directed
to review the rail outputs. We have done that. In each case, of
the ones I have seen, there is always something which can be implemented
and taken forward and some of them in quite short order.
93. The M25 study has assumed that projects
such as Thameslink 2000 and Cross-Rail 1 and 2 will be constructed
by 2016. Will that happen?
(Mr Steer) The Thameslink 2000 public inquiry inspector's
report is with the Office of the Deputy Prime Minister and he
has made an initial judgement which does not give the powers yet.
We are very hopeful he will be minded to provide those powers,
but those powers have not yet been granted. You can take a view
on that. I remain extremely hopeful that it will be implemented.
Cross-Rail is yet much further back in the queue, so I am afraid
it is an exercise of judgement. My guess would be that Thameslink
2000 certainly will have been implemented. It is harder to say
for Cross-Rail.
94. What about freight studies? Is the SRA interested
in freight studies? You have been criticised.
(Mr Steer) Hugely interested in freight studies. This
is an area where the multi-modal study areas are a particular
problem. Rail freight tends to be longer distance.
Chairman
95. I am going to stop you because I just need
to clarify something. Are you telling me that because Railtrack
was in administration for a year no work was done by the SRA or
by Railtrack on the multi-modal studies? There was no input.
(Mr Steer) No, I am not saying that.
96. So why do these things now come as a surprise
to you?
(Mr Steer) I do not think they come as a surprise.
I am not surprised that the cost estimates on further scrutiny
turnout in some cases not to be very accurate. I am not surprised
by that.
97. That is because the rail industry has not
shown itself good at controlling its costs?
(Mr Steer) No, it is because the nature of identification
of these schemes, which the Department for Transport witnesses
made clear, are preliminary assessments by their very nature.
When you get into the detail, you sometimes discover that it will
actually cost a great deal more than you first thought to implement
them.
Clive Efford
98. I am surprised by your answer in respect
of Cross-Rail, that you cannot give any commitment that the Cross-Rail
scheme is likely to go ahead. Given the length and amount of discussion
there has been on this scheme, it is somewhat disappointing to
hear—declaring my interest here as a London MP—that
you cannot give any firm commitment at all at this stage.
(Mr Steer) Government has not made any firm commitment.
We have not yet been asked to give a view to government and indeed
we would not as yet be in a position to do so because we have
to see what the cost benefit case for the project is. I am hopeful
that will emerge in the near future and then we shall be in a
position to make a view known to ministers and the process will
move forward from there.
99. I know from first-hand knowledge that a
lot of planning is taking place in parts of London affected by
Cross-Rail, they are making a lot of assumptions. Are you involved
in those?
(Mr Steer) Yes; indeed.
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