Examination of Witnesses (Questions 140-159)
MR TIM
O'TOOLE
8 DECEMBER 2004
Q140 Chairman: I want to know about performance
scores. Why are they going to dispute resolution in quite such
numbers?
Mr O'Toole: Why do we have so
many disputes?
Q141 Chairman: Yes.
Mr O'Toole: If you think about
the number of attributions we go through it is a miracle how few
do go to dispute.
Q142 Chairman: How long does it normally
take?
Mr O'Toole: Outside it can take
as much as four to five months to get through adjudication. That
is a theoretical possibility. There have only been to my mind
two or three disputes that have even gone that far. Some disputes
are listed as disputes but are not being actively pursued while
I think people wait to see how this gets defined and whether it
gets resolved another way. Some of these disputes are currency
to solve other problems. I will say that as more and more money
starts to get involved here disputes are going up.
Q143 Chairman: What about the PPP arbiter?
Is it a good process? Is it producing fair results?
Mr O'Toole: The PPP Arbiter does
not have a role in the disputes you are talking about. This is
a separate process. He as yet has not been called on to settle
anything.
Q144 Chairman: At all? Not even though
he has had a first year?
Mr O'Toole: No.
Q145 Chairman: You did talk about the
engineering overruns and you criticised the private companies.
Have they got worse under the PPP?
Mr O'Toole: They did for a period.
The second half of last year they got far worse if you measure
them in the kind of service point system that is used in the PPP.
They have now come back down again and they are performing at
about the level that they did prior to the PPP and a lot more
work is being done.
Q146 Chairman: Do they walk away with
the money, these Infracos, if the work is not completed in the
way it should be?
Mr O'Toole: Ultimately if the
assets fail they have to pay for that.
Q147 Chairman: Yes, but that is a rather
long way down the line. Are they walking away with the money in
the interim? You will understand, Mr O'Toole, that the taxpayer
looks for sums that appear to be being paid to these companies
at the same time as they are getting what may be quite arbitrary
and small fines in comparison, and one begins to wonder who is
being taken to the cleaners here.
Mr O'Toole: The way it works is
that if they have an engineering overrun the interruption to service
hits them with an availability penalty. At the same time they
are hit with service points which cost a lot more, so there is
a financial penalty. Whether or not that penalty is sufficient
to drive them is what we are all learning as we experience this
contract.
Q148 Chairman: Have you got enough power?
Are you convinced that you know that the safety case for London
Underground is being upheld by the Infracos?
Mr O'Toole: I definitely have
the power to do that. It is just a question of whether I exercise
the right judgement with the amount of resources that I have put
into that and I think I have. I do not have enough power with
regard to forcing the PPPs to work with the PFIs. I do not think
anyone appreciates the enormity of that problem. If you think
about the fact that they have an obligation to deliver trains
and I have an obligation to deliver power, some of these companies
are on both sides of this deal. This gets very complex going forward.
You cannot help but read the headlines of this awful situation
on the Northern Line with this ancient radio that is falling over
and crippling our service. At the end of the day the real cause
of that is the fact that the Connect radio system, this other
PFI, is at least two years late now and over budget and it makes
the PPP look like pure elegance, believe me.
Q149 Chairman: I do not find that a comforting
thought.
Mr O'Toole: No, it is not, but
forcing everyone to co-operate to deliver these assets is something
I do not have sufficient power over.
Q150 Chairman: Is this an American version
of, "It cannot get any worse"?
Mr O'Toole: No. I would not sit
here if I did not think ultimately we would deliver. We will deliver.
Q151 Clive Efford: The HSE report into
the derailment at White City concluded that the underlying cause
of the derailment was the failure by Metronet Rail BCV Ltd to
fully comply with specified measures which had been prescribed
by London Underground as a result of the Camden Town derailment
in October 2003. That clearly suggests that there were specific
recommendations made by yourself that they failed to carry out.
Are you saying that you do not have any powers to penalise or
enforce those recommendations?
Mr O'Toole: No; actually, I do.
If you go further into the report you will see the self-criticism
that we should have made explicit and this is our lesson learned
for the future: the methodology by which they assure us that they
have actually followed through and done that, or we put more people
in the field so that we can assure ourselves. In fact, in this
case we had made the decision when it came to track to put more
people in the field. We decided to expand that force so that we
would have more human beings out there watching the work that
was done. The gap between the cup and the lip here was that the
decision was made that we were going to enforce our terms that
way but people had not been recruited at the time of that accident.
That is why there is criticism of London Underground in there
as well as of Metronet.
Q152 Clive Efford: Okay, but there was
Chancery Lane. Lessons should have been learned from that which
could have assisted when White City occurred and Camden Town.
Again, there was the Chief Engineer's regulatory notice. Are you
putting enough pressure on the Infracos to invest in the areas
that would avoid these accidents and learn the lessons of these
accidents and avoid them in future against, for instance, spending
money on ambience?
Mr O'Toole: I do not choose to
spend money on ambience, although I am happy that they do it.
I do not think the things are mutually exclusive. No-one is more
interested in the subject than I am given whose signature is on
the bottom of that safety case, I assure you. I think that we
could have done better on White City. We will not make that mistake
again. Once we issue one of these CERNs how they have to assure
us that they have complied with it. At the end of the day a derailment
happened and it should not have.
Q153 Clive Efford: What about safety
in terms of overcrowding? Are you tackling overcrowding?
Mr O'Toole: As I said before,
the only way to deal with overcrowding is to have a more reliable
train service. I would say with regard to dealing with overcrowding
when it comes to the safety issue that there are probably few
organisations in the world that know as much about it or are as
good as London Underground in terms of being able to control the
crowds by the station staff in our network. Unfortunately, it
produces some uncomfortable situations, such as it does every
morning at 8.00 am at Victoria when we lock people out of the
Bostwick gates or lock people out of the Bostwick gates at Kings
Cross now, but all that is dictated by the safety plans for each
of the stations.
Q154 Chairman: We would just like to
know whether you are going to approve the attempt of Jarvis to
sell one third of its stake of Tube Lines.
Mr O'Toole: I will not know until
I am presented with the proposal but I can see situations where
existing shareholders might want more of Tube Lines and that might
be a good thing. I think it is very important for us as London
Underground to be assured that the technical resources that are
being supplied under this secondment agreement are preserved.
It is very important that if there is any return that should be
coming to London Underground (the taxpayers in effect) it is provided,
and that the entire structure is not made more fragile as a result
of any change in ownership.
Q155 Chairman: You see, that is the point.
What controls do you have on the sort of company that could replace
a sponsor company like Jarvis?
Mr O'Toole: The contract has a
series of tests about what we may object to. With regard to the
character of the company, it refers to—
Q156 Chairman: But you will forgive us
saying so: one would not have found that any relevant test was
necessarily applied to Jarvis given its subsequent history, so
are we going to do better?
Mr O'Toole: It defines it in terms
of someone being convicted of a crime. Oddly, it defines it as
someone who presents a security risk under UK or US law, so presumably
Cat Stevens could not buy it.
Q157 Chairman: I would not dream of quoting
that.
Mr O'Toole: I assure you we are
going to go through every single word possible with a fine toothcomb
to protect London Underground's interests.
Q158 Chairman: You did say that with
Connect PFI you inherited a poorly managed contract which failed
to deliver. Have you turned it round?
Mr O'Toole: We have certainly
taken out the management and put in new management. We have made
it quite plain that we are no longer going to pay claims whenever
they file them. That is going to be a big court case.
Q159 Chairman: What about the power outage?
That was last year really quite a problem and it called into question
the resilience of the PFI. What improvements have you made since
that?
Mr O'Toole: In a couple of different
areas. The biggest improvement probably is the own goal that happened
there, which was the grid and EDF not communicating with London
Underground and telling them when they were taking resources off
line and removing resilience that would have allowed us to rebalance
the power intake from our supply points. Even if it had gone out
it would not have affected us. That has now been dealt with. We
now have regular meetings with them. Their maintenance schedules
are given to us. Any time they introduce a weakness into their
network because of their maintenance activity we change the sourcing
of our power. That is one thing. We have also spent a lot of money
trying to change our whole command control system, such as it
is, with more discriminating phone systems and the like so that
we can deal with the management of the situation faster. As you
know, that evening our station staff performed brilliantly in
the sense that they moved that many people out of the network
and no-one was hurt. What we were not designed for was putting
them back in again and that was the great distress. People wanted
to know, "Why can I not get on a train?" an hour and
a half later. It was because the power had to be left off because
somebody was still de-training over here. We have spent a lot
of time changing our own management systems to address that.
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