Examination of Witnesses (Questions 140-159)
MR PETER
EWINS
23 MAY 2006
Q140 Mr Jones: The obvious question
is: why did it fail? I naively thought that you left when you
left the MoD, so it is perfectly good question. Tell us why it
failed?
Mr Ewins: Why it failed is a story
that will take rather longer than we have got this morning.
Mr Hancock: Try us with the abridged
version?
Q141 Chairman: Can you tell us, in
headline form, your view as to why weatherXchange failed?
Mr Ewins: I can. I think the all-important
relationship between the key players is that the joint venture
broke down. There was loss of confidence between the various parties
and, as a result of that, weatherXchange was unable to raise the
finances that it needed to see it through its initial phases and,
as a result, it went into liquidation.
Q142 Mr Jones: That will not do.
It is a great civil servant answer.
Mr Ewins: It is not meant to be.
Mr Jones: It is. I am sorry. We have
to ask (1) who the key partners were, (2) why did they breakdown
and (3) what was the trust that clearly broke down between them?
If you were Chairman all this time you obviously know a lot more
than you are willing to tell this Committee today?
Q143 Chairman: If you ask the questions,
Mr Ewins may well give us the answers. Who were the key partners?
Mr Ewins: There was the Met Office,
there was Zions Bank, there was BHP Billiton and Cindy Dawes,
I have forgotten the title of her group.
Q144 Chairman: The relationship broke
down between which of those partners?
Mr Ewins: Between the Met Office
and Cindy Dawes and her associates, probably between Zions Bank
and the rest, and I will stop there.
Mr Jones: The Met Office was you?
Q145 Mr Hancock: No, he had left.
Mr Ewins: No, at the stage where
it broke down I was not the Chief Executive of the Met Office.
Q146 Mr Jones: But were you the MoD's
representative on the Board?
Mr Ewins: No.
Q147 Mr Jones: What were you then?
Mr Ewins: I was Chairman of the
Board, elected by all the constituent Directors of the Board.
Q148 Mr Jones: Did you get paid for
that?
Mr Ewins: I did not get paid as
Chairman. I got paid expenses and costs.
Q149 Mr Jones: This is intriguing,
chairman. You left Met Office as Chief Executive.
Mr Ewins: It was at the request
of all the parties that I was invited to stay on as Chairman of
the Board of weatherXchange, that is the Met Office, Cindy Dawes
and associates and Zions Bank. Indeed, I would go further than
that, I would say that it was seen as an important aspect of the
future of weatherXchange that I should be in that position.
Q150 Chairman: Yet, although you
had left the Met Office, you were being paid as Chairman of weatherXchange
no more than costs and expenses.
Mr Ewins: Formally I was not paid
to be Chairman. I was Chairman, but my expenses in my relationship
with weatherXchange were recoverable, yes. I was paid a per
diem rate.[2]
Q151 Chairman: Although you had originally
been appointed to weatherXchange as a director and, as Chairman,
as a representative of the Met Office, once you had left the Met
Office, am I right in saying you were no longer a representative
of the Met Office or of the MoD?
Mr Ewins: Absolutely. That was
an essential feature. To get the time-line right, before Zions
Bank came into weatherXchange as a partner, an investment appraisal
was carried out by the Met Office as to whether it was a sensible
thing to do. That investment appraisal came to an end almost at
the time I left the Met Office. Because of that, I declined to
make a decision about the future of weatherXchange, leaving that
to my successor. My understanding is that my successor and his
people at the Met Office came to the conclusion that it was a
sound investment, and further investment followed. That brought
in the Zions Bank investment at the same time. So when I left
the Met Office and was invited to stay on as Chairman in my own
right, the funding for the future of weatherXchange had been assured,
and that was funding from the Met Office and by bringing Zions
Bank into the picture.
Q152 Mr Jones: You were a civil servant,
were you not, when you were in the Met Office?
Mr Ewins: Absolutely.
Q153 Mr Jones: Did you get clearance,
when you left the Met Office, to go and work basically in a commercial
organisation which any senior civil servant, if they left, would
have to do? Did the MoD or Whitehall or somebody in the Civil
Service clear you for that?
Mr Ewins: No. Let me explain.
I was not cleared, and the reason was that it was unclear whether
I needed to be or not, and this was not established until weatherXchange
was in decline that that decision was made. The reason for that
was that I was invited to stay on by the Met Office, as well as
others, and it was seen to be a continuation of the job I had
already held and not a new appointment.
Q154 Mr Hancock: When it was set
up, you said earlier that the expertise that the others brought
was their knowledge of the market place?
Mr Ewins: Yes.
Q155 Mr Hancock: How did that manifest
itself in the early days then?
Mr Ewins: Because that was the
way by which the business came into weatherXchange.
Q156 Mr Hancock: But where were the
main customers for your operation?
Mr Ewins: In the financial institutions
in terms of derivatives, etcetera.
Q157 Mr Hancock: So they came fairly
thick and fast, did they?
Mr Ewins: No, they did not come
thick and fast. The market place for this kind of work had mushroomed
in the States. It had not really taken off in the UK at all, but
we believed it would do. The partners, and this was Cindy Dawes
and others, had knowledge of that market place, and slowly, more
slowly than we would have liked, the business began to grow, but
it did not grow as fast as we would have liked it to have done,
and that was part of the reason why weatherXchange failed, but
only part of the reason.
Q158 Chairman: Was it the experience
of what had happened in the United States that caused the Met
Office to go into this partnership in the first place, because
you saw an opportunity which was not being exploited in this country
where the best meteorological advice was available?
Mr Ewins: It did not cause us
to do it, the cause came from an approach, but when we did the
investment appraisal, that was a very strong element, the fact
that there was a potential market place in the UK and Europe which
had not been tapped into.
Q159 Mr Jones: The relationship broke
down, you said, between the Met office and Cindy Dawes. Who at
that point was the Met Office's representative on the Board? It
was not you, was it?
Mr Ewins: No, it was not me.
2 Note by Witness: The per diem rate
was £350 when working on behalf of weatherXchange, which
included chairing Board Meetings. Back
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