Examination of Witnesses (Questions 400-405)
MR BILL
EMERY, MR
MICHAEL BESWICK,
MR BRIAN
KOGAN, MR
MARTIN STANLEY,
MR JOHN
BANFIELD
19 JULY 2006
Q400 Mr Leech: On the same point,
you are saying to us that you are aware of some limited commercial
opportunities, so if you are aware I am sure all the rail companies
are aware and I am sure that the Department for Transport is aware,
so what is it that is stopping those commercial opportunities
from becoming realities?
Mr Emery: I think there are uncertainties
around in other places that need to be resolved on these matters.
I think there is a need for Network Rail to have a much better
handle and publish a much better handle on the capacity of routes,
and the route utilisation strategies they are going through at
the moment will provide a basis for that. I think that people
should be encourage, and it is a matter that we will, as a regulator,
as part of our job when we are doing access, look on and use our
procedures that we set down fairly and openly to judge any open
access operation. What this means is that we are not seeking open
access to be primarily extracted from existing franchisees; it
is not a cherry picking exercise, this is where there are real
new markets that can offer an additional service and that is the
primary need.
Q401 Chairman: So we can take it
from your evidence that this is not going to be a large number?
Mr Emery: I do not think it will
be a large number.
Q402 Chairman: Mr Stanley, finally,
I am sorry to come back to this vexed question of costs again,
but supposing we said to you, "Cut the costs of applying
down to a tenth of what they are at the moment," could you
do that?
Mr Stanley: You could say that
the companies should spend one-tenth and they would be absolutely
furious because they would not be able to use the clever economists
and clever lawyers that currently are very successful. What we
can do and what we have done is work with the OFT so that we do
not ask different questions of them. We have joint information
requests and so on, so we have had a number of meetings with the
OFT, ORR, Department of Transport, to smooth the whole system.
So I am sure we could do more but we have done a lot already to
cut the costs because we are aware of it. But basically, any serious
competition inquiry into a very big, long-term franchise has to
be done well and it is going to be quite expensive.
Q403 Chairman: So when the companies
say there is no case law and each time they apply they have to
start from scratch, that is wrong, is it?
Mr Stanley: There is a certain
amount of precedent but, of course, they are very anxious to try
and get away from precedent when it does not suit them. In very
simple terms, we could have turned round to First Group and said,
"Look, Bristol looks to us very much like Glasgow and Edinburgh.
You know what happened there. We imposed price controls to save
people complaining about the bus fares and coach fares coming
up. Can we do a deal?" They would not have accepted that.
They said, "No, we want to argue about it" and we were
persuaded in the end that, for various reasons, the railway density
was different, car use was different, Bristol was not like Glasgow
and Edinburgh, so each case really has to be looked at on its
merits.
Q404 Chairman: So what you are saying
really is that the costs are very much in the hands of individual
companies, and when they tell us that it is all your fault, they
are not being 100% accurate?
Mr Stanley: I do not think they
ever say it is our fault.
Q405 Chairman: Oh, Mr Stanley, you
should be sitting where I am sitting!
Mr Stanley: They said the system
is very expensive and they wish it was not, but they have not
come to us . . . They have suggested a number of ways in which
we could make the system slicker, a little quicker, a little better,
and we have done all that. They have not suggested any way in
which we could significantly cut the costs without disadvantaging
your constituents. We are protecting the customer at the end of
the day. We are protecting people who travel on buses and coaches.
Chairman: We have total faith in you,
Mr Stanley. Gentlemen, thank you very much indeed. Do come back
again, please, Ms Abbott. We will ask you the awkward questions
next time.
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