Examination of Witnesses (Questions 18920
- 18939)
18920. We discussed Mr Spencer's findings with
our client the following day and we met with Crossrail again last
Friday and then indicated to them that we were prepared to negotiate
the proposed collaboration agreement on OSD, taking as a starting
point those entered into by the other landowners, but we were
not yet satisfied that the Crossrail scheme was a sound one and
we would therefore like more time to consider the lengthy reports
as well as the proposed design for the station works on the property.
We said, "Let's negotiate the OSD agreement, but we must
reserve our position because frankly you have not convinced us
or anybody, we think, that your proposals make sense. Let's reserve
our position on that, we will negotiate the OSD if you are prepared
to give us reasonable access to your team so we can ascertain
whether your works are correct or whether they can be improved".
Crossrail's response to this last Friday, as we understood it—they
will present their own version if they differ from this—was
that no further discussions could be taken forward on that and
if we had any questions about the principle of the scheme we had
better raise them today. In the light of that my clients were
forced last Friday to come to a considered view on the merits
of the AP3 proposals upon the basis of the reports that we have
seen. Mr Spencer has done some further work in the time available
for my clients and we have come to the view that they are not
justified and we will tell you why in a moment.
18921. Exhibit 5, if I can have it, just to
outline the scene.[12]
We have tried to help you, sir, by providing a headline summary
of what Mr Spencer has told us and wishes to outline to the Committee.
Effectively what we are saying is that the design work undertaken
to date by LUL is minimal; that appropriate options have not been
assessed; that the LUL preliminary modelling, this is the modelling
referred to earlier, shows that the proposed scheme addresses
forecasted LUL congestion and not Crossrail induced congestion
(Mr Spencer will explain that in more detail). The modelling also
shows that Crossrail will not worsen but rather improve conditions
in the main West One ticket hall. Nothing in the Promoter's case
demonstrates the need as part of Crossrail for an LUL entrance
and ticket hall on the north side of Oxford Street.
18922. If I can have my next exhibit, exhibit
6.[13]
I mentioned, sir, that one of the documents that we received from
Crossrail on 18 January was the London Underground report to DfT
which considers four options. This is a report from July of last
year which is effectively a submission to the Department for Transport
indicating the basis upon which it was felt that it would be helpful
for this scheme to be part of the Bill. Option three we think
is particularly interesting; it is not the one that they went
for. This is option three that we have put up. As you can see,
this option makes it very clear that even London Underground believes
that only certain specific elements of its proposals relate to
Crossrail congestion relief and that other elements, such as the
ticket hall, step-free access and emergency access improvements,
would have to be excluded as not relating to Crossrail. That was
one of the options. On the face of it, sir, I hope the Committee
would agree that this report does begin to demonstrate that there
is a real question to be answered as to whether these proposals
are genuinely for or related to Crossrail and whether they have
been sufficiently developed to be included in the Bill. Mr Spencer,
who I will call in a moment, will deal with those things in more
detail.
18923. I now turn to the proposed powers and
the proposals for the prospective over-site development and the
collaboration agreement. Introducing this very briefly, sir, you
will know that Crossrail has a land disposal policy whereby landowners
will be offered in certain defined circumstances an opportunity
to acquire an interest in land which has been compulsorily acquired
from them where that land is not required for the operation of
Crossrail. That is their land disposal policy.
18924. One of the problems with this from the
landowners' point of view is that it leaves the Secretary of State
with wide discretion as to what interest would be offered back
and, more importantly, it provides no certainty now as to whether
in fact an interest would be offered at all. Now, the Secretary
of State has given an undertaking, and we actually do have it,
it is my exhibit 8, which is the undertaking which he gave to
you on 15 February 2006 which states that "planning applications
and environmental statements for the proposed OSDs are to be submitted
as soon as reasonably practicable and, in any event, no later
than two years after the commencement of construction of the Crossrail
works".[14]
The Secretary of State is saying that, although these properties
will be knocked down and their replacement is not part of the
Bill, something will be brought forward in the short term, but,
as the Secretary of State intends to use private sector experience
in progressing the design and planning and in order to be sure
that the option for the original landowner, in this case GE Pensions,
to ensure that they will be allowed back to do OSD in a manner
that is worthwhile, it is very important, you will appreciate,
for the landowners to have much more certainty about the eventual
outcome than they obtained simply from the land disposal policy
which offers a potential option for having the land back and the
Secretary of State's undertaking which says that development proposals
will be advanced.
18925. What these landowners, in essence, are
concerned to do, and it has been the case with the others who
have negotiated OSD agreements, is to ensure that further substantial
design work is done and it is not always clear that Crossrail
is either willing, or will be funded, to do this, but further
substantial design work is done so that, if they obtain the opportunity
to undertake the OSD, the railway works have been refined, proper
consideration has been given to the possible OSD as to how it
will be developed and justice is done to the OSD opportunities.
If there is not collaboration now, the fear is that they may be
offered by Crossrail a development proposal that they can have
back, but it simply will not be the one that is appropriate for
the site. It will be, if I may be unfair to our railway colleagues,
designed for railway purposes when actually we are talking about
over-site development on very important sites. That is why the
landowners in these cases have sought collaboration agreements
and we have in this case.
18926. Ms Lieven correctly points out that Winckworth
Sherwood by way of a letter, exhibit 7, did confirm on behalf
of the Promoters that a collaboration agreement is on offer to
GE Pensions Limited, and I think she is asking me to make clear,
which I now will, why we are still saying something about that.
When we saw the Promoters last Friday and we said to them, "Yes,
we're willing to negotiate the OSD agreement, but we need to reserve
our position about the principle of the scheme", the Promoters
said, "No, you can't reserve your position about the principle
of the scheme", and that was the end of the discussion and
people left the room. I think, but it needs to be confirmed, that
that letter is still on offer, that we have not done anything
effectively for that proposal to offer us an OSD agreement to
be negated.
18927. The other aspect of it is that we then
made clear that there are special circumstances here which may
require a departure from the standard form of OSD agreement that
has been agreed in other sites and we were not demanding last
Friday that Crossrail agree the principles of these departures,
we were merely asking them to confirm that they would negotiate
on these with us and that we would not be told, if we went away,
that it was the OSD agreement as it applied to other sites with
no changes.
18928. Now, the three aspects that we asked
them to confirm they were willing to negotiate on a bona fide
basis are as follows. Firstly, on the direct involvement of London
Underground: the existing OSD agreements on other sites are simply
with Crossrail and they do not involve London Underground, and
you will appreciate we are talking about London Underground works
here, so it seemed to us reasonable to say that we would want
to be able to discuss with them the direct involvement of London
Underground in this. Secondly, we indicated that we felt there
were some issues about the timing of their prospective development
here. There was plainly a prospect of works being undertaken in
advance of the main Crossrail works. It is, in a way, a separate
London Underground package, is it not, and therefore in principle
we felt that the Promoters ought to be able to negotiate with
us on that. The third thing is that we have asked if they can
negotiate with us on changing the limitations on what is called
the `additional contribution'. Now, sir, I do not think I need
trouble you with what the additional contribution is, it is a
very complex collaboration agreement which is in prospect, but
there are financial terms in it and there is a cap within there,
though that may not work quite for this site. We are not asking,
and we did not ask last Friday, the Promoters to agree a different
one; we merely asked them to confirm that they would negotiate
with us on a bona fide basis possibly for a different term on
this rather than to say, "No, it's the old agreement or nothing
at all". Therefore, when Ms Lieven says to the Committee,
"The position is plain, you asked for that letter",
we would be entirely happy with the OSD point if it is confirmed,
which I think it has been, that that OSD letter is still open
and, secondly, that Crossrail and London Underground will be open
to discuss these points by way of possible, but not certain, variation
to the standard terms. That is where we are on the OSD point.
18929. Sir, I can conclude that my clients are
inviting the Committee to conclude that the case for taking the
property as part of the AP3 proposals is insufficiently proven,
and you will hear from our witness in a moment on that. For that
reason, secondly, it just should not happen and it should be deleted
from the Bill from the AP3. If, on the other hand, you are not
persuaded about that, at the very least the Promoters should provide
reasonable access to our property and engineering consultants
to engage with their Crossrail counterparts to answer what we
consider are very valid enquiries about whether these proposals
are properly founded, and whether they cannot be improved upon,
whether, for instance, it is not possible not to take the whole
of the retail floor because we can lead evidence on this, if necessary,
but I do not think it is, but I think we can all appreciate that
there is a real possibility that, if you take away the entire
retail element of a building on Oxford Street, OSD does not become
very attractive at all and rather less than viable. Meanwhile,
as I say, if Crossrail can confirm this, we will negotiate with
them a provisional OSD agreement always assuming that these provisions
remain part of the Bill.
18930. In making these requests, sir, we do
ask you to consider whether on the documents you have before you
Crossrail really have proved that there is a compelling case in
the public interest to acquire compulsorily this property. We
do believe that is the appropriate test. We would further ask
you to consider whether it does not appear that these works have
been parachuted into the Bill at this advanced stage on an opportunistic
basis merely for the benefit of London Underground. If they are
really necessary for Crossrail, why, you may ask and we still
ask, were they not included in the Bill from the outset?
18931. Finally, sir, we would just like to emphasise
that my client has had really very little time to prepare its
case for today. We believe we do have a proper case to make and
that we can substantiate it to you, but we have had very little
time, and I have to say that that model, for instance, is news
to us. I gather it has been around for some time, but we have
never seen it before and Mr Spencer has not had it referred to
him. We have had to struggle a bit, but we ask for your indulgence
if there are a few gaps in the way we present this. That is my
opening, sir, and, as I say, I have three witnesses, but I propose
to go straight to Mr Spencer.
18932. Ms Lieven: Sir, on the over-station
development point, you have seen the letter, and we have indicated
that the offer in there is still open. Sir, our position is that
it is only possible to move forward on the collaboration agreement
once the landowner accepts that the property is to be acquired
and is needed for the scheme, so we are not prepared to go in
parallel negotiations proving it is needed while at the same time
negotiating the collaboration agreement. We do not believe that
is a sensible way to go forward.
18933. On the three specific points that have
been raised in relation to the collaboration agreement, those
are really detailed negotiation points which I will call Mr Smith
later, if necessary, to deal with, but I would very much question
whether or not the Committee was the appropriate place to try
to bang out the terms of a collaboration agreement such as this,
but, as I say, if, having heard our evidence, the Committee wants
to hear Mr Smith on those three points, I will call him, which
I suspect would be tomorrow. There have been prolonged negotiations
in respect of the collaboration agreement through Bircham's, other
landowners and indeed with this landowner and I am quite unwilling
to get into the position where those negotiations do not become
exercised through the mirror of the Committee, but Mr Smith can
give you evidence on each of those three points. He is not in
the room at the moment, sir, which is why I am hesitating, as
it were, to give the evidence through me because I do not want
to get it wrong.
18934. Chairman: Mr Thompson, do you
wish to proceed?
18935. Mr Thompson: Can I call my first
witness, my only witness as it may be?
Mr Tim Spencer, recalled
Examined by Mr Thompson
18936. Mr Thompson: Mr Spencer, you have
appeared before the Committee before, but can you give us your
professional details please.
(Mr Spencer) My name is
Tim Spencer and I am a Director of Steer Davis Gleave, independent
transport consultants and advisers to GE Pensions Limited. I have
indeed provided expert witness evidence to the Select Committee
on several occasions on behalf of British Land and the City of
London Corporation, so I am the same Tim Spencer.
18937. Mr Spencer, when were you instructed
by this client?
(Mr Spencer) About a week
ago.
18938. You understand the basis upon which you
were instructed only a week ago, that the Promoters' response
document was received only just before that and the reports that
we have asked you to look at were not part of that and were received
last week.
(Mr Spencer) I spoke to
our clients in expectation of the information becoming available
last Wednesday and they received the information last Thursday.
18939. If we can firstly concentrate on the
history of these proposals, they were not part of the original
Bill, were they? Were they in response to any of the Committee's
considerations or anything which has happened on the Bill, can
you just confirm that?
(Mr Spencer) As far as I
am aware, there has been virtually no discussion whatsoever about
Bond Street ticket hall as part of the Select Committee's considerations
and certainly there has been no decision by the Select Committee
which led to the need for Crossrail to submit AP3.
12 Committee Ref: A216, Headline Summary of Tim Spencer's
Preliminary Findings (WESTCC-AP3-49-05-005). Back
13
Committee Ref: A216, Option 3-Make provisions for the LUL upgrade
scheme in part (WESTCC-AP3-49-05-006). Back
14
Committee Ref: A216, Proposed Undertaking to Parliament-Over-Site
Developments (OSD) (WESTCC-AP3-49-05-008). Back
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