Select Committee on Transport Minutes of Evidence


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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