Examination of Witnesses (Questions 120-139)
MR PETER
EWINS
23 MAY 2006
Q120 Mr Jones: So you have got to
take some responsibility for its failure, have you not?
Mr Ewins: As I have said before,
I probably do, but I think that many things have happened since
which, I believe, were a primary cause of the failure of weatherXchange.
I do not believe the way it was set up was the primary cause of
the problem.
Mr Jones: What was the reason that it
failed?
Q121 Mr Hancock: Can I ask one question.
You kept referring, you mentioned it three times, to the fact
that it was a joint venture.
Mr Ewins: Yes.
Q122 Mr Hancock: The Met Office put
£1.5 million up front and all of the expertise that you had
available. What did the others bring to the table?
Mr Ewins: They brought the knowledge
of the market place and the credibility to operate in that market.
Q123 Mr Hancock: Did they put any
money in?
Mr Ewins: I do not think so.
Q124 Mr Hancock: So it was hardly
a joint venture, was it, because the Met Office took all the losses,
put all the money up front, put all the money in to get the thing
going; they brought all of their expertise to deliver what weatherXchange
was going to offer as a product and they covered all of the losses,
wrote off all of the debts that were incurred. It does not seem
to me to be very joint?
Mr Ewins: During the lifetime
of weatherXchange there were other key investors: Billiton, for
example, and Zions Bank.
Q125 Mr Hancock: What did they actually
physically put into the pot for weatherXchange?
Mr Ewins: My recollection is that
at the start they did not put anything into the pot. I cannot
remember for certain, but I believe that it was not anything to
start with.
Q126 Mr Hancock: You felt that was
a good deal for the Met Office?
Mr Ewins: Yes, because what we
were trying to do was to break into a market where there was a
clear niche in the market place, but we did not have the expertise
to tap into that market. The folk that we had partnered came in
with a proposition which would enable us to do that.
Q127 Mr Hancock: They told you they
would give you open access to this market?
Mr Ewins: They brought the expertise
to that market.
Q128 Mr Hancock: Why did it fail?
Mr Ewins: Gosh, that is a different
question, if I may say so, and I am not sure I am treading on
ground which I should be treading on, because I had left the Met
Office by the time the thing went pear-shaped. I think I had better
stop there and wait for you to ask me some questions.
Q129 Mr Jones: I find it remarkable
that I can come along and say to you, "This is a proposition
that I want the Met Office to get involved in." There is
no market test for this. You say, "Fine." You come on
board. I give you £1.5 million of taxpayers' money. You put
the thing into the pot. Are you seriously saying that is how this
was actually set up, because to me that sounds incredibly naive,
if not amateurish. If you had done that in local government, frankly,
you would have been shot.
Mr Ewins: I am not sure I have
got the right figures for this. I am slightly concerned about
the way I have put this to you, but when weatherXchange was created
it was the intention to bring other funders, and we did that.
Q130 Mr Jones: It is not a joint
venture then. I am sorry, it is basically a wholly-owned company
of the Met Office. We put the money in. It is hardly a joint venture.
A joint venture, as I understand it from my experience, is, for
example, as in local government, where you put land into a company
and then the company puts development money in. That is a joint
venture, where you are bringing monies together. Here (and it
seems to me very naive) we have a situation where the only person
who is taking any risk is the taxpayer?
Mr Ewins: I can understand what
you are saying.
Q131 Mr Hancock: The other partners,
effectively, got paid, did they not?
Mr Ewins: No.
Q132 Mr Hancock: Their expertise
you paid for; so it is more than a joint venture. You might as
well have just hired some advice and you would have got it a lot
cheaper, and maybe it would have succeeded. It seems to me that
they gave you advice, they did not do that for free, and yet £1.5
million was spent, plus nearly another £1 million was lost?
Mr Ewins: We need to separate
those two sums out. There was the start-up funding and there was
the subsequent funding, which was not just from the Met Office
but from Billiton, Zions Bank, etcetera.
Q133 Chairman: When did the subsequent
funding get put in?
Mr Ewins: It was paid in tranches.
Billiton came on board first and then Zions Bank, and that would
have paid, I guess, over the past three years, something like
that.
Q134 Chairman: That was after you
had stopped being Chief Executive?
Mr Ewins: No, a little bit of
it was while I was there and the rest was afterwards.
Q135 Mr Hancock: What was that money
for? What was that investment for? Just to keep it going? Was
it already in trouble then?
Mr Ewins: It was not in trouble,
but it needed financial support; that is true.
Q136 Mr Hancock: You had not found
this market that they knew about?
Mr Ewins: You are taking me now
beyond where I was running the Met Office. It would be then that
they had to make this decision. My understanding is that they
carried out an investment appraisal before they put any more money
into weatherXchange at the same time as Zions Bank were being
invited to put money in.
Q137 Chairman: I think it is quite
important that we should not take Mr Ewins beyond his own personal
experience.
Mr Ewins: I was Chairman of weatherXchange
during the whole period.
Q138 Mr Hancock: So you have got
an involvement. When did that cease?
Mr Ewins: We need to be clear.
I remained Chairman of weatherXchange until it went into receivership.
Q139 Mr Jones: So after you left
the Met Office?
Mr Ewins: Yes, but I took on that
job with the full support of the Met Office as one of the joint
venture people; so me carrying on was seen by them to be an important
aspect of the future of weatherXchange.
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