Examination of Witnesses (Questions 120-139)
MR TIM
O'TOOLE
8 DECEMBER 2004
Q120 Mr Stringer: Do the large bonuses
paid to the management of the private sector companies operating
in the Tube system cause problems with industrial relations? Do
they make it more difficult to come to a deal?
Mr O'Toole: They have not been
raised with me.
Q121 Mr Stringer: Do you have a sense
that they are pushing things along?
Mr O'Toole: I think that they
are obviously a fun thing to make headlines with but once people
made the decision to go with private sector companies I think
they were buying into the way they broadly went.
Q122 Mrs Ellman: In your first year report
you expressed disappointment that the Infracos had not invested
in more modern equipment. What powers do you have to do anything
about that?
Mr O'Toole: Very little other
than to enforce the contract. We do expect, however, that they
are obligated to set forth on this whole life asset strategy which
includes the way they would maintain those assets and we have
been pushing them, and with their co-operation, quite frankly,
for a complete articulation of this. It is all provided for under
the contract. It is mostly a constant cajoling and negotiation.
There is no reason for them not to do it once they decide it will
deliver work more efficiently.
Q123 Mrs Ellman: Are you satisfied that
the companies will maintain safety as the assets age?
Mr O'Toole: Yes, I am. One thing
that was said here earlier that actually is inaccurate was about
safety. Safety is unified. It is all under me, actually. The safety
case for all four companies comes back to me. London Underground
holds the safety case. It is our job to make sure that they work
safely and it is our job to put the systems in place that establish
safety assurance. As a result I can say to you that I believe
they will maintain safety because I intend to ensure, and I know
anyone in this chair would ensure, that they do.
Q124 Mrs Ellman: Are you concerned about
the complexity of the number of interfaces in relation to safety?
Mr O'Toole: I am concerned, and
I was also concerned about the fact that this was run around so
much prior to the PPP that it was just kind of hanging out there.
If you think about it, if something happened it would be very
easy for people to say, "You never dealt with that allegation",
so one of the first things I did when I came in here was to engage
A D Little, a completely disinterested expert, to come in and
examine those interfaces themselves. They did about a six-month
study and came back and while they did comment on the complicated
structure they also found that the interfaces were explicitly
dealt with. To deal with them requires more work. There are no
two ways about it. They do present safety risks but the risks
have been dealt with within the safety case of the design.
Q125 Mrs Ellman: I would just like to
clarify what was said and minuted to. Are you saying that you
are responsible for safety matters?
Mr O'Toole: That is correct.
Q126 Mrs Ellman: So if anything is wrong
it is your responsibility, not the Infracos'?
Mr O'Toole: Obviously, I look
to them under our contract with them, but under the statutory
regime that is set up the safety case that reports to the file
with HMRI and HSE is a London Underground safety case.
Q127 Mrs Ellman: What is the current
position concerning Jarvis apparently wishing to sell off its
stake in Tube Lines?
Mr O'Toole: They have had some
preliminary negotiations with us. I can only tell you that we
were not impressed with them. We are led to believe that some
further proposal will be made and we have a right to object to
anything they may do though we do not exactly have a veto right.
It is very unclear the extent of our rights and it will be a function
of the deal they present. For the last few days it has been quite
quiet on that front.
Q128 Mrs Ellman: You say you were not
impressed with the case they made. What were the criteria that
you were looking at?
Mr O'Toole: It was not obvious
how it was in the interests of London Underground.
Q129 Mrs Ellman: And you are confident
you will be able to maintain the interests of the public in making
any future decision?
Mr O'Toole: I can only assure
you we are going to expend a lot of energy doing that.
Q130 Mrs Ellman: Do you believe you have
sufficient powers to achieve that?
Mr O'Toole: Based on what I have
been presented with so far I like to think so, yes.
Q131 Mrs Ellman: You would like to think
so? Do you think so?
Mr O'Toole: I am sorry; I do not
mean to be coy. The point is that they obviously spent some time
and money trying to structure a deal so that it got around our
power to do something about it. We do not think it succeeded and
told them so. We think that at the end of the day common sense
will prevail and the rights we are supposed to have will be honoured,
but on the other hand I have spent a lot of my time in the finance
sector and I know how clever people can be.
Q132 Mrs Ellman: Do you think you have
the powers to deal with the public interest despite how clever
people may be?
Mr O'Toole: I believe I do, but
we will see.
Q133 Mrs Ellman: What are your views
on the PPP's ability to deliver step-free access to Underground
stations?
Mr O'Toole: The PPP delivers very
little step-free access. I think at the end of the day of 255
stations of the stations we serve only 16 will receive step-free
access as a result of the PPP work. It was explicitly taken out
of the deal. That is one of the primary things we hope to deliver
through this new work via the prudential borrowing. It is very
difficult. The engineering on this is really tough but the Mayor
is absolutely determined to do something about this and it is
clear; I have my marching orders. What we are doing is looking
at every single station project and we are not trying to design
the perfect system. We are trying to make use of the works that
are going to go on anyway to figure out where is it we can put
in an MIP lift, where is it we can do something about the platforms
and try to be very opportunistic. Our hope is that at least by
2010 25% of the network will be cleared and we will keep going
from there. We are ultimately hoping to get half the network step-free.
Q134 Chairman: Have you got enough information
to scrutinise the Infracos' performance?
Mr O'Toole: No. We have final
agreement on the information we will get. We are finishing the
creation of the systems that will supply it, but I still do not
have the information.
Q135 Chairman: Why not?
Mr O'Toole: Because it has taken
us the better part of the year to argue over what it is and what
it should look like between us and the Infracos. Peace has finally
broken out all over but, as I say, it is still to be finalised.
Q136 Chairman: London Underground did
not have a register of the condition of its assets before it handed
over the infrastructure to the PPP, did it?
Mr O'Toole: No, it did not.
Q137 Chairman: So how are you going to
solve many of the problems which will undoubtedly arise from that
lack of information?
Mr O'Toole: Fortunately, unlike
the Railtrack situation, this deal provided for the creation of
what are called asset catalogues by each of them. Tube Lines was
required to deliver theirs within two years and Metronet was supposed
to try to do it in two years but ultimately four. This is one
area where there has been co-operation because what has happened
is that the companies have pulled together. They are delivering
those catalogues on time but then they have worked with us and
we are separately funding what we modestly call the single source
of truth that will be an asset register for all the assets they
maintain, the assets we maintain and the assets the PFI contractors,
who you cannot forget because they have a big slug of this too,
maintain. There will be a single asset register so that anyone
will be able to tell the state of the assets, when they were last
touched, etc, the very things that should tell us how to maintain
the assets.
Q138 Chairman: How long will it be before
that magic state is achieved?
Mr O'Toole: It is starting to
come on line now. We are not waiting to do it as one big bang.
Q139 Chairman: A final date? What are
we talking about?
Mr O'Toole: The final date is
another year from now but it will have limited functionality within
the next few months.
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