Examination of Witnesses (Questions 540-559)
MR DAVID
WABOSO, MR
GILES THOMAS,
MR PAUL
PLUMBER AND
MR ANDREW
MCNAUGHTON
16 JUNE 2004
Q540 Chairman: Do they accept it?
Mr Waboso: They certainly accept
. . . If we wind back a little bit. When we produced what we call
our so-called final report in 2002 that was a big step, because
it was the first time that people had actually looked at this
and said, "Hang on a minute, there are cost issues, there
are affordability issues, there are technical feasibility issues",
and I think at that time, from memory, the timescales being talked
about in this country were about 2010.
Q541 Chairman: So we were pushing a system
which nobody had tested and there was no cost benefit analysis?
Mr Waboso: But we did point that
out. That report was ultimately very well received in Europe,
and a number of other countries are voicing exactly the same opinions
now, that this system does cost too much, the benefits are not
proven and they have perfectly adequate national systems now.
The way we control how we roll this out is that it will not be
told, from Europe we will not be told, "You must install
this system by a certain date." The way we control this is
we are able to put in our plan of what it is we intend to do,
and that is fine. The current plan we have is that which was set
out in the report, which is around the timescales that are linked
to a re-signalling programme that are very much at variance from
the initial suggestions, and that has proven to be perfectly adequate.
I do not know if my colleague wants to add anything, but in terms
of controlling the pace of roll-out, we will not be told, "You
must install it by a certain date."
Q542 Chairman: You are not controlling
it if all you are doing is saying, "Well, at the moment we
are just putting it off", are you?
Mr Waboso: What we are doing is
proving the system. What we are doing is on the Cambrian coast,
and that is why we did that trial.
Q543 Chairman: I see. So, with any luck,
you will be able to come up with some answer that says, "It
is unworkable. It costs a million pounds a shot"?
Mr Waboso: What we are seeking
to do on the Cambrian coast trial—
Q544 Chairman: Apart from that, it is
ideal!
Mr Waboso: —is to prove
the system does work.
Q545 Chairman: Of course?
Mr Waboso: If it does not, we
will fix the problems. We will also get a much better view of
how much it does cost, because it will be the first time it is
done in this country.
Q546 Chairman: How long is this test
going to run? It is going to start in 2008?
Mr Waboso: 2006 it starts and
it will finish—
Q547 Chairman: It runs for two years?
Mr Waboso: —in 2008. We
will know far more then.
Q548 Chairman: Could you not make a good
business case for the UK rail network being inter-operable with
its neighbours on the basis of what you actually do, as opposed
to some system which might work?
Mr Waboso: I think we have—.
There is a clear choice in this. Before ETRMS came along and before
we signed up to high speed directives, we did try and produce
a BR ATP system. I think one of the advantages, which perhaps
we have not spoken about this afternoon, of a European wide approach
to these things is that the research and development costs to
produce these systems, which are significant, are pooled across
a much broader range of countries. Therefore, if this system does
work, and I fully accept there are significant problems still
to be solved, but if this system does work, then you start getting
the advantages over a long period of time of the fact that it
is produced for a large market and the costs of producing it are
shared across a large number of schemes.
Q549 Chairman: Does the European Rail
Agency fund the research?
Mr Waboso: No, the European Rail
Agency does not fund the research. The products have been produced,
in some cases funding has come through some trials, some early
trials, that were done in mainland Europe, but the suppliers themselves
have funded a large part of this research programme.
Q550 Mr Marsden: On this issue of costs,
I know Mr Plummer has mentioned cost benefits, can you give the
Committee some figures for each area, not just the ETRMS, but
also for infrastructure, rolling-stock, and signalling. Can you
set out what will be the costs of European harmonisation and what
will be the cost benefit analysis, to tell us in very simple terms
where this is cost beneficial? Do not all rush at once!
Mr Thomas: As part of the process
for accepting TSI's in Europe, each TSI comes with a cost benefit
analysis.
Q551 Chairman: Technical standards for
inter-operability.
Mr Thomas: I beg your pardon,
that is right, technical standards for inter-operability. Each
one comes with a cost benefit analysis.
Q552 Mr Marsden: Is that broken down
in the UK or is that across Europe?
Mr Thomas: It is across Europe.
Q553 Mr Marsden: How do we know it is
a good thing for this country, apart from an article of faith
that we should be involved in it?
Mr Thomas: We have to assess them.
As we are involved in the negotiations, we will assess them to
understand whether or not the impacts of those technical specifications
for inter-operability have a positive or negative cost benefit
for the UK.
Q554 Mr Marsden: So you do not have the
costs at the moment, but as and when they arrive you will be able
to publicise them, for instance?
Mr Thomas: Yes.
Q555 Mr Marsden: Yes. I have got some
shaking their heads and some nodding?
Mr Waboso: I think it is fully
accepted that the regulatory impact assessments that should be
done with these things that identify how much it is going to cost,
what the benefits are, could have been done better. I think that
is fully accepted. One of the things that the European Rail Agency
will start to get its head around is how it can have better structures
to get this work done. It is fundamental that we do understand,
as we go forward, how much it is going to cost and what the benefits
are. Going back to what Andrew said, we are talking when we bring
in these new assets to these new standards about very long timescales
and in those timescales we control the implementation, we can
decide when we implement it; and the way we decide when we implement
it is that on a particular scheme we will say, "On this scheme
this new standard applies. Does it make sense to do it? How much
is it going to cost?" We will then go to the market and we
will say, "What are the prices coming back?" If the
prices are out of court, if it is unaffordable, we will not do
it.
Q556 Mr Marsden: You say that, but, with
respect, what is unaffordable? How do you know, for instance,
that the European TSIs are not going to be set excessive high
levels which might disadvantage UK partners? What is affordable,
and not affordable to industry? You say a million pounds per cab,
per locomotive. If that is what the figure is, that sounds like
an awful lot, but at the same time how many lives would it save?
There are two areas that I am concerned about. Firstly the cost
to industry and the cost then to the passengers, because no doubt
they will get the cost passed on to them, Secondly how do we engage
with the public so that they understand this: because the Prime
Minister uninspiringly said the other day, "The European
constitution is a great thing for technocratic reasons"?
Chairman: We do not want to give them
a subject for debate. We just want to ask them the odd question.
Q557 Mr Marsden: With respect, how do
we know this is going to be a good thing?
Mr Waboso: Perhaps others can
add to this, but where there is a scheme for renewal or for upgrade
we have pretty good estimates of how much these things cost today.
Q558 Chairman: We hope. Yes.
Mr Waboso: We hope. We understand
from historical records how much it costs to re-signal per kilometre,
per signalling equivalent unit, how much rolling stock costs.
We understand that today. Therefore there is a base line. We want
to get that down. There is constant downward pressure on those
numbers, but we do have a benchmark. If we go to these new specifications
and the prices come in significantly above that, there is not
a case for doing it: because the whole point of doing it is not
to penalise the railway, it is to make the railway more competitive.
Q559 Chairman: I think, Mr Waboso, the
point we are making is a very simple one. Some of us had the old-fashioned
idea that you ought to do that before you suggest it is a common
standard rather than after you bring in a common standard and
then discuss whether or not you can afford to do it and whether
it works, which seems to me an elementary thought but not one
that is readily accepted at European standards.
Mr Plummer: Could I just comment
on that?
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