Examination of Witnesses (Questions 16420
- 16439)
16420. A great deal of time has been spent before
the Committee by the freight industry raising issues related to
capacity and access which, while they may be genuine issues, are
ones not for the Bill or the Committee. The Promoter does not,
of course, dispute the importance of the use of rail by the freight
industry or aggregates industries but much, if not most, of what
is being put before you can be dealt with in one of the following
ways. Firstly, the issues arise in any event due to existing capacity
constraints on the network. Secondly, they do not arise because
Crossrail does not generate significant capacity issues or, thirdly,
they fall to be addressed by the normal regulatory processes in
seeking an Access Option from Network Rail with the approval of
the Office of the Rail Regulator.
16421. The freight sector has been at pains
to point out the importance of its operation but the Committee
may think its approach to the issues of capacity almost as if
Crossrail were engaged in attempt of theft. It has been anxious
to stress the shortcomings of the assessments made to date, the
issues which remain to be addressed, and, by strong implication,
the virtual entitlement of the freight sector to take up future
capacity in the network.
16422. The reality is that the public interest
lies in striking a balance between the various rail interests,
passenger and freight, and it is indisputable, giving the approval
in principle of the Bill, that Crossrail is a major project demanding
major investment to achieve a range of objectives in the public
interest. I will remind you of what Mr Steel of ATOC said on day
48, that the rail industry was firmly in favour of Crossrail.
I have quoted that.
16423. The Committee may find it helpful when
reflecting on the attitudes of some within the freight industry
to review, for example, the evidence of Mr Smith of EWS on day
51, paragraphs 14874 till 14875, when under cross-examination
from Ms Lieven, Mr Smith could not even bring himself to admit
that Crossrail was a large-scale and long-term investment. We
say that is indicative of the sort of attitude we have been faced
with.
16424. The rail industry is of major national
importance for many reasons. However, that does not make it either
reasonable or realistic to demand, as many Petitioners have, that
Crossrail should be required to resolve. Such matters lie outside
the Bill and, if you will forgive me for saying, sir, the concerns
are ones which are under consideration by the Secretary of State,
and, indeed, raised by Mr Hopkins in a PQ to the Secretary of
State on 11 July. He received an assurance from the Secretary
of State that these matters were under active consideration.
16425. I repeat our opening statement without
reading it out on day 48, paragraphs 13669 to 13691. The reason
I do that is because I said a lot on that day, which I am not
going to repeat today, about there being adequate capacity on
the Great Western for rail passengers. There is clearly legitimate
concern that for those coming into London from the West on passenger
services—and I know it is a matter that was raised by Mrs
James in particular as a concern—there is not a capacity
issue so far as the west is concerned. You will know from our
evidence that we gave that there are some minor beneficial effects
to the works proposed at Paddington and, indeed, that further
works to upgrade that part of the network are proposed in any
event. I have not set that out here because I have set that out
at length in opening.
16426. I turn first to the Access Option. It
is essential that the Promoter can be sure that the Crossrail
service will operate at the levels that Parliament have been told
that it will. Raising finance for the project depends on there
being secure track and station access rights sufficient to run
the level and quality of service necessary to realise the benefits
of the project. That security must be provided over a timescale
which enables potential investors to have some security that there
will be return on their investment. There is a precedent found
for this security in section 17 of the London Olympic Games and
Paralympic Games Act 2006.
16427. The issue then is whether it is by means
of an Access Option or by means of Bill powers that the security
should be provided. We have given you our detailed position in
information papers H3 and H4.
16428. The Committee has heard Petitions from
a large section of the freight community who are concerned about
the implications of the Crossrail Bill on the ability of the industry
to grow in the future. The consistent theme is one of fear concerning
the scope of the Bill powers in relation to the utilisation of
capacity. Rather than utilise the Bill powers, some Petitioners
have submitted that an Access Option should be sought pursuant
to the existing rail regulatory regime. We confirmed on day 48
in opening that this was the approach that was going to be adopted,
see paragraphs 13675 and following on day 48. It is anticipated
that the Access Option will be obtained during the passage of
the Bill and before it passes to the House of Lords. Once the
Access Options have been granted, the Promoter has indicated that
it will review the extent of the Bill powers and cut them back
accordingly. Until the Access Option has been granted, it is not
possible to specify the nature of the amendments that will be
pursued. As you know, sir, the Minister, Mr Twigg, wrote a letter
on 29 June of this year confirming the approach which is also
the approach set out in information papers H3 and H4. So, there
is no doubt—and we repeat the points we have made so often
during the last few weeks—an Access Option is being pursued
for Crossrail. It will be considered by Network Rail and the OFF
under the existing and unmodified regulatory regime. Network Rail
and ORR will want to be satisfied of operational viability, and
once they are, the industry will be consulted. Operational viability
includes matters such as demonstrating a robust timetable and
that the infrastructure will be sufficient.
16429. We have set out our position in greater
detail in the paper that was provided at the Committee's request,
the Crossrail Timetable Working Group and Access Options process
Next Steps which we referred to briefly yesterday and was
sent to the Committee at your request.
16430. The issues which will have to be demonstrated
to Network Rail and the ORR are set out on the fifth page of that
paper and at appendix C. It explains all the many elements that
go into improving operational viability, which include the two
factors I have mentioned and on which the rail industry has focused
in the last couple of weeks. It will not be considered, as Professor
O'Keefe believed, on the basis that Crossrail should have a priority,
that is what he said on day 51, paragraph 15022. This misunderstanding
undermines the Professor's evidence because the basic premise
upon which his allegations of conflict with EU law is flawed.
No modification would be made, of course, until the regulatory
regime under the Bill became law, so the Access Option currently
sought will be under the current law and in accordance with the
normal industry practices. Contrary to Mr Kingston's suggestions
for Tarmac, day 54, paragraph 16394, there is no threat hanging
over the ORR's head. The Access Option must be granted according
to the current law and practices. Indeed, you may well think,
sir, that the freight industry would be the first to challenge
a decision by the ORR which sought to depart from current law
and industry practices.
16431. The Bill powers are highly likely to
change. The relationship of the Bill powers to the existing regulatory
regime and to European law is highly likely to change as the Minister
has already pointed out. It would therefore be premature and may
well be a pointless exercise for the Committee to concern itself
with issues relating to the relationship of the Bill to the exiting
regulatory regime and to the EU directives.
16432. I turn to deal briefly with the duration
of the Access Option which was a point raised. As to the appropriate
duration of the Access Option, that matter is one best left to
Network Rail and to the ORR to determine on the evidence presented
to those bodies according to normal practices. The EU Directive
and the transposing regulations both make it clear that Access
Options can be granted that exceed 10 years in duration in exceptional
circumstances: "In particular where there is large-scale
and long-term investment and particularly where such investment
is covered by contractual commitments". That is regulation
18(9) of the Railway Infrastructure and Management Regulations
2005.
16433. It is apparent that the regulatory regime
recognises that Access Options may need to be of longer duration
in order to enable the financial security necessary for the funding
of the project to be obtained. We suggest that it is obvious that
Crossrail is "large-scale" and "long-term investment"
despite Mr Smith and EWS's unwillingness to accept that on day
51.
16434. Capacity: The Timetable Working Group's
conclusions that there is sufficient capacity for Crossrail and
freight growth on the GWML is made clear. That covers concerns
of the aggregate industry about which the Committee heard much
last week. The TWG included substantial representation from the
freight sector and, as Mr Watson told you on day 48, reached substantial
agreement on the report. It is all the more curious that having
done so they should now be seeking to distance themselves from
it for the purposes of their Committee appearance.
16435. Despite criticism from some Petitioners,
it is clear that TWG has carried out a significant amount of work.
This was made clear not only by Mr Watson on day 48 (see paragraphs
13697 and following) but it was confirmed by Mr Steel for ATOC
on day 48, at paragraph 13904. What he said was: "There has
been a considerable amount of joint working, in particular the
Timetable Working Group has carried out some good work, as has
the Rail Industry Stakeholders' Forum, and the Government has
brought forward proposals which in principle begin to address
many of our concerns including information papers H1-4 dealing
with railway matters". He goes on in similar vein.
16436. Of course, while it is correct that work
remains to be done, clearly much work has already been done to
show the Committee that there are sound reasons for considering
capacity issues are not created by Crossrail.
16437. So far as traffic from the haven ports
is concerned, Crossrail makes virtually no impact, and any impact
there is balanced by the provision of the Chadwell Heath Loop,
which was dealt with on day 53.
16438. As far as the Great Eastern Mainline
from the Thames Ports is concerned, the Timetable Working Group
concluded that there was insufficient capacity for the freight
growth beyond 2015 because of the capacity constraint between
Forest Gate and Stratford even if Crossrail did not come along.
The Committee will recall that Mr Garratt's own figures in his
table 8 lend support to the Working Group's own conclusions and
what he said yesterday, day 54 at 16329 in response to questioning
from me and when I put to him the 197% for 2030 he did not deny
that further works either on this route or on other routes will
be required to reach that level of utilisation.
16439. Mr Steel of ATOC also agreed that work
would have to be done ahead of Crossrail to improve capacity on
the Great Eastern; again day 48, paragraphs 13930-13932. The point
is made by reference to the tables appended to the Working Group
report that Crossrail makes the position worse. However, this
argument fails to acknowledge that what is made worse is already
not working because the system is at capacity without Crossrail.
Crossrail cannot break what is already broken. A solution to the
capacity constraint on the Great Eastern Mainline has to be found
whether Crossrail is constructed or not. It is therefore a problem
that does not fall for Crossrail to solve.
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