Examination of Witnesses (Questions 80-99)
MR PAUL
PLUMMER, MS
JANET GOODLAND,
MR ROB
HOLDEN, MR
THEO STEEL
AND MR
PAUL SMITH
19 OCTOBER 2005
Q80 Clive Efford: Have you costed the
works that are necessary to bring existing stations into line
and to make them deviate and comply?
Mr Plummer: Across the network
as a whole the government has provided £370 million over
the next ten years which is the basis of the work we are doing
to prioritise where we would spend the money, but there is a huge
amount to be done across the network as a whole and that prioritisation
work is important.
Q81 Clive Efford: It would be ironic,
would it not, if the transport network that is providing the links
for the Paralympics were not fully accessible?
Mr Plummer: That would be one
of the things to take into account in determining where to spend
that fund of money that is available.
Q82 Mr Martlew: My head is spinning a
bit about the various projects that not only yourselves but the
other witnesses talk about. There was a problem just getting the
Jubilee Line there on time for the Dome. We are talking about
a number of projects all probably running into hundreds of billions
of pounds. Firstly, do you believe that there are the skills there
to carry out those projects? What effect do you think it will
have with regard to wages? Do you not think there is a grave possibility
you could well go over budget on these projects because there
is a skill shortage and supply and demand will mean that you will
have to pay extra?
Mr Plummer: In terms of the skill
shortage, we have done a lot already in the last few years since
the creation of Network Rail to bring in the skills in terms of
the detailed design work and to take that forward. The engineering
capability of the company is greatly enhanced as well as using
consultancy resources. In terms of delivery as well, our capability
is much stronger than it has been at stages in the past. This
will only work if it is planned very carefully, in a very integrated
way, not just in terms of the individual projects but with all
of the other things that go on in the railway, the renewals that
happen every day and the day to day operation of the railway,
the access that is needed to do the work, to ensure that that
is not too disruptive to the normal passenger services. We need
to plan that very carefully and work with all the other parties.
There is a lot more work to be done there and that is what we
have to focus on in the next few years.
Q83 Mr Martlew: Is that a yes, you have
the skills and no, it will not have a part in the price inflation?
Mr Plummer: We have an issue with
price inflation already in the sense that there is a huge amount
of investment going on in the railway. The major challenge is
to deliver very substantial efficiency improvements on the back
of that. The additional works in terms of the Olympics and other
issues can place additional pressure on that. We have to try to
manage that through the supply chain and do it effectively. If
we can do it well through good planning, the risk will be minimised
but certainly it is going to be a major challenge.
Q84 Graham Stringer: Mr Holden, the National
Audit Office suggested that you might need £260 million-worth
of further public subsidy if your business did not improve and
you did not get more customers. Is that a realistic estimate?
Mr Holden: Yes, I think so. It
is very much along the same lines as the number published by the
NAO in its first report back in 2000 or 2001. We recognise that
and we believe it is fair.
Q85 Graham Stringer: Is business improving?
Mr Holden: Business was improving
up until 7 July. Since 7 July, for obvious reasons, business has
been very difficult and we need to get back to that situation.
There are signs of recovery and the sooner we can pick up and
build up a base that will provide the momentum we need when Section
2 is commissioned in 2007, the better.
Q86 Graham Stringer: In paragraph 3.3
of your evidence, the first sentence, you say you have a 99 year
lease for the track, which I understand, and the commercial opportunities
created along the route. Could you expand on that? What commercial
opportunities do you have? What business, apart from running trains,
are you involved in?
Mr Holden: This is very much the
development of the lands that I referred to earlier. At King's
Cross we are working in partnership with Argent.
Q87 Chairman: Is that a developer?
Mr Holden: It is a developer owned
by Hermes, the Post Office pension people, very well known for
developments they have undertaken, particularly in the Midlands,
working closely in a number of areas with the Office of the Deputy
Prime Minister. We also have a huge development at Stratford which
is part of the Olympic proposal and there we have received master
planning consent earlier this year. We are taking it forward with
development partners and we are also involved in the Ebbsfleet
Valley with Land Securities.
Q88 Graham Stringer: Is there anywhere,
where you have the lease on this land and the commercial opportunities
that is in conflict with the development of the Olympic sites?
Are you likely to have to have any of this land compulsorily purchased
so that the Olympic Games can go ahead?
Mr Holden: That is currently an
issue which is being discussed at length with the London Development
Agency, who are discussing with us and other interested parties
the scope of land that they wish to compulsorily purchase. I am
hoping that we will be able to come to an appropriate agreement
but there is a little way to go on that yet.
Q89 Graham Stringer: Potentially, you
would be getting a quarter of a billion pounds worth of further
public subsidy and, at the same time, the public sector is going
to have to buy land off you that was given you to develop in order
that the Olympic Games can go ahead. Is that right?
Mr Holden: That is the potential.
The reason why there may be a price associated with the compulsory
purchase is because of the commitments we have entered into with
our development partners who have committed already substantial
sums of money, I believe well in excess of ten million. They will
require some compensation for that.
Q90 Graham Stringer: Is the implication
I am supposed to draw from that that London and Continental will
not be making a profit out of this lease that was handed over
to them for nothing?
Mr Holden: The surplus which will
arise from the development lands is shared with the Department
for Transport, I believe on a 50/50 basis, and the balance which
comes to London and Continental Railways will be necessary to
offset the losses that we are currently accumulating on the services
that we have been providing to date.
Chairman: Say that again. I am not sure
I got that last bit.
Q91 Graham Stringer: I did not get it.
That was a very complicated answer to what I thought was a relatively
simple question. Are you going to make a profit out of this land
that was handed over to you?
Mr Holden: Hopefully there will
be a profit which will be used to offset the losses that we have
been incurring to date.
Q92 Mr Goodwill: The local authorities
whose evidence preceded yours seem unsure as to how the Olympic
events at Stratford will be timetabled and that would have quite
an effect on passenger numbers and spectators. Is it the situation
that you will be told, "These are the events. These are the
times. Please provide rail services in and out" or will there
be some degree of liaison so that these peak flows can be evened
out to some extent?
Mr Steel: I have been involved
in discussions while the bid was being put together as to the
structure of the Games. The first week, the major events on the
Stratford site tend to be swimming. The second week it is athletics.
The major coincidence is over the middle weekend which is a Saturday
and a Sunday when we do not have as much peak so that is a very
good opportunity for us. The events tend to start at 11 and go
on quite late at night as you have seen from previous Olympics,
so that you optimise the television time but we will not go into
that. That obviously does give us opportunities to run trains
outside the normal peak. It is going to mean quite an emphasis
on staff rostering nearer the time and we are already thinking
about how many people we shall need to do this. We have done other
things like this in the past. I am minded of the millennium celebrations
when we successfully took people back to Essex and all around
London until four in the morning and got thanked by the Mayor
incidentally. There are other events that we do: football matches,
Wembley, Cardiff events. Manchester United run quite a lot of
extra trains into there on the relevant occasions.
Q93 Mr Goodwill: Do you envisage there
may be opportunities in terms of ticket pricing, off-peak tickets
to encourage people to arrive earlier or leave later?
Mr Steel: That is more a downstream
issue. I want to see the detail worked up. At the moment, it is
a broad concept. What we do know is that there are the facilities
to take 179,000 people off the Stratford site on the ten railways
that radiate from there in an hour, which is something I do not
think you would find in either New York or Paris, but someone
can correct me if I am wrong. This is a huge opportunity for the
railways, for the underground and the Docklands Light Railway
to make a good name for themselves.
Q94 Chairman: This is the Olympic Javelin
you are talking about?
Mr Steel: No. That is all the
railways in and out of Stratford. We have four track railways
at Liverpool Street. There is the Central Line to Epping and into
the City. There is the North London Line. There is the line down
the Lea Valley. There are four tracks down to Shenfield and Essex
and that is before I have even thought about the District Line
or C2C at West Ham which is further down. The core site has a
lot of rail connections of various different types that are not
dependent on each other particularly and that must be one of the
reasons why the bid was successful. There are obviously other
sites outside and we will be working to ensure that you can go
and watch the canoeing at Broxbourne or Weald Park at Brentwood
which is the nearest station to that in Essex. At Wimbledon we
run services during Wimbledon fortnight and we have experience
of that. There are Windsor and Eton for rowing and there are various
football stadia around the country.
Q95 Clive Efford: Are the train operating
companies involved in any discussions about through ticketing
or admission tickets and cooperating in those discussions?
Mr Steel: I would not want to
prejudge the Olympics Bill at this stage but as soon as we understand
the details and what is wanted we want to make sure we are not
working against the principles of the Olympic movement because
we have had some offers previously made on fares but they had
to be withdrawn during the bid period. We need to be quite careful
over what we can and cannot do. Yes, fundamentally, there is an
openness to fares deals.
Q96 Clive Efford: Would it not be logical
to have those discussions before the Bill is drafted so that you
can point out the problems that might exist?
Mr Steel: I am more than happy
to engage in the software decisions and the soft decisions on
pricing as well as the hard decisions.
Chairman: I think it is the passengers
who think they are soft.
Q97 Clive Efford: I am probably going
to get a similar answer but would not the Oyster card simplify
matters in terms of integrated transport across London?
Mr Steel: We would hope to have
moved along before 2012 on getting the Oyster card more widely
available on the railway.
Mr Clelland: The Chairman mentioned the
Olympic Javelin. What contribution is that going to make in moving
people from central London to the Olympic site?
Q98 Chairman: We need to know how robust
your figures are.
Mr Steel: They are not my figures.
They were quoted in the DPTAC evidence.
Q99 Chairman: The candidature file we
are talking about suggests 25,000 people an hour and apparently
you say the capacity would be 14,000 seats an hour.
Mr Holden: It effectively arises
from eight paths per hour of 12 carriage trains. I believe the
normal domestic train on the CTRL will ordinarily be six carriages
but, for the purposes of the Olympic Games and the Javelin services,
they will be joined to form 12 carriage trains.
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