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

Examination of Witness (Questions 80 - 99)



  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.


  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.


  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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