Select Committee on Crossrail Bill Minutes of Evidence


Examination of Witnesses (Questions 20260 - 20279)

  20260. There are five matters to which I want to refer, falling into two categories: the first two matters are unfinished business, and simply a line or two; the three other matters will take a little more time.

  20261. Chairman: We will call this A231.

  20262. Mr George: Thank you, sir. Sir, the Committee will recall at Day 51, paragraph 15089, that Mr Berryman, appearing for Cross Rail, admitted that there had, to date, been no modelling of individual movements into and out of the various freight sites with Crossrail in the 2015 with-freight growth position. So far as EWS is aware, that remains the position today and it is exacerbated by the proposal in AP3 that EWS's site at Old Oak Common should become the principal Crossrail depot, therefore with additional movements in and out in that position. I mention that matter not to retread the old ground but so that the Committee is aware of that bit of unfinished business, and I come back to the topic in a moment.

  20263. Second, the Committee will recall how concerned EWS and others were that the details of the proposed access option were so uncertain, and therefore the relationship to the railway clauses in the Bill; and that remains the position.

  20264. Sir, on those two matters I merely now take the opportunity to request the Committee to require the Promoters to make the latest position absolutely clear to you and to the Petitioners whilst this Committee still has control over this Bill, rather than leaving the matter over as unfinished business to another place. I say no more about that matter; that is our request, that you be given a very clear update while you still have command of the Bill.

  20265. Sir, I then turn to the substantive part of my opening, and these relate directly and exclusively to AP3 and the provision for Old Oak Common and North Pole. As the Committee is aware, and you have just heard Mr Elvin on the matter, if there is to be a Crossrail depot at Old Oak Common then some or all of EWS's activities will have to be displaced. I know that two members of the Committee inspected the Old Oak Common site last week. AP3 expressly provides for the relocation of EWS's activities to North Pole on the south side of the main line and for new connections from North Pole to the main line. Could I ask that our Tab 4, EWS 44 be displayed, and the Committee there can readily see identified with a white line the two sites with which we are concerned and their immediate proximity to one another either side of the railway line.[15]

  20266. EWS would rather maintain all its activities at Old Oak Common but it seems that is simply not feasible. If they are to be displaced then they now, following detailed discussions with Cross Rail, welcome the balanced package in AP3 which would allow EWS to continue to benefit from a depot with the very special location advantages which these sites in their particular situation west of Paddington have. Our position here today is simply that the Promoters honour the AP3 package.

  20267. The reason we are here is that very recently we have discovered, and the position is now laid wholly plain by Mr Elvin in his opening this morning, that the Promoters are now contemplating only partial implementation of AP3—compulsorily acquiring the Old Oak Common site, and thereby displacing all or some of EWS's business but not providing the replacement at North Pole. This is obviously a matter of the gravest concern to EWS for reasons which Mr Smith will explain. At this point, can I emphasise the need for some certainty for EWS. No-one can say for certain that Crossrail will be built, but EWS need to know that they can either continue at Old Oak Common with all their activities or that if Crossrail happens they will be going to North Pole. In that way the country's largest freight operator can plan. What it cannot plan is if it does not know what is going to be the outcome.

  20268. There are three separate points which I wish to address the Committee on. The first deals with the Promoter's estimate of costs. As the Committee knows, Standing Order 45 requires the Promoter to deposit an estimate of costs in a particular form. That Standing Order was followed in this case, and I would ask that Tab6, EWS46, be displayed.[16] At the bottom of that table under item 3 the Committee will see listed the cost of the works at North Pole, which were for the benefit of EWS's occupation, and the figure there of £73 million. Those figures form part of an overall budget for the revised Depot Strategy which led to a saving compared with the original Depot Strategy of £105 million. Can I ask the Committee to bear in mind that the revised Depot Strategy, even with those costs at North Pole, leads to a saving to the public purse of over £100 million.

  20269. Implicit in that deposited estimate was an assurance to this House that were AP3 to be approved the Promoters had carried out a proper costing exercise and that the Promoters had not only budgeted £73 million for the construction costs at North Pole, but that they were promoting AP3 in the full knowledge that construction costs of that order would be required.

  20270. Inevitably there is also an element of compensation to EWS for the additional costs that it would incur in operating from North Pole compared with Old Oak Common. I do not think that is a matter that has ever been in dispute, although strictly some allowance ought to have been made in the Parliamentary estimate for those on-costs. The key thing is that the Promoters must have been anticipating that there was what I will term £X to be added on to the £73 million, which is simply construction and relocation costs.

  20271. Now mindful of the pressing need to reduce costs, EWS have cooperated with Crossrail in re-examining the figure there of £73 million and we have found that at some loss to operational efficiency it is possible to reduce that figure of £73 million down to £59 million, still including the appropriate contingencies. That is for the cost of the construction works at North Pole and the relocation costs. The principal reduction is that, instead of there being two new connections to the main lines to North Pole, there is notably one connection. We could live with that.

  20272. We have also looked very carefully at the ongoing costs, that is the £X which as I say is implicit and had to be added on because we were aware that the first calculations of those ongoing costs rather took Crossrail aback. We have managed to reduce them enormously. At the end of the day we now have a package which comes out at a total figure of just under £83 million, so that £X is the equivalent of £10 million. Actually the £X is more than that, but by reducing the construction element to £59 million one comes up with a total package of £83 million.

  20273. My first point to the Committee is to say one is therefore plainly within the ballpark of the original Parliamentary estimate, which was always budgeting for £73 million plus X. All we ask of the Promoters is that they now undertake that, if we are displaced, the North Pole works are carried out to provide a workable depot for EWS, and to include a figure for ongoing costs.

  20274. The second matter to address you on briefly is a matter of environmental law. As the Committee is well aware Standing Orders require the environmental appraisal of major infrastructure projects, such as Cross Rail; and it has been held by the European Court of Justice in the case of Luxembourg v Linster—a copy of which was submitted to the Committee last week by the Mayfair Residents' Association, although I think the Committee could be excused if they did not read that because I know that petition went short, but I have a copy for the Clerk if she was wishing it—it was their rule, paragraph 54, simply one sentence, that "It is only where the legislature has available to it information equivalent to that which would be submitted to the competent authority in an ordinary procedure for authorising a project that the objectives of the Directive may be regarded as having been achieved through the legislative process".

  20275. That is why AP3 has been accompanied by its own environmental appraisal, and we do not criticise that appraisal at all. The purpose is so that not merely Members of Parliament but also the public at large can assess the overall project in the light of the amendment proposed by AP3. Rightly, such an environmental appraisal has to include the entire project which was AP3, including North Pole and including all mitigation measures. In a way, the North Pole works are mitigation measures because they overcome very substantially the disadvantages to EWS and to Rail Freight and to EWS's passenger services of being displaced from Old Oak Common.

  20276. So far as the addendum ES, it perfectly properly assesses the combined package of Old Oak Common and North Pole, both in terms of employment and the carriage of freight by rail and road. Of course, there will not be a detrimental impact on freight whether on the railway or on the road if the package is implemented. The terms of the Environmental Statement on AP3 could not be clearer in stating that EWS, not merely may be relocated to North Pole, but that they will be relocated there, subject, of course, to the Bill receiving the Royal Assent in a form which still includes AP3.

  20277. Could I ask that tab 5 of our bundle, please, be put on the board, starting with page 171 of the Environmental Statement.[17] It is a few pages into that and it has got a green line beside it. You see there with Eurostar vacating the North Pole Depot it is proposed that EWS relocate to this facility. Members of the Committee will note it does not say there is a possibility that they will relocate or there is an option that they may relocate. If we could then go on to the next page, which is page 181 at paragraph 17.5.42, one is looking at the resultant employment effect and one sees the displaced EWS employment will be relocated to the North Pole Depot.[18] So the Environmental Statement is in the terms exactly as we understood that it would be, of a genuine and firm proposal for a package as part of this depot strategy. It is flatly inconsistent with this Environmental Statement, and therefore with the relevant EC Directive, for the Promoters now to cherry-pick, saying they propose to take Old Oak Common, or to take Old Oak Common all but for a very small part of it, but that they may choose not to carry out the works at North Pole and they may choose not to relocate EWS to that site. That is not the project which was appraised in the Environmental Statement. Of course, I accept that the Promoters could crave the Committee's indulgence for an adjournment and produce and publish and allow representations in respect of a revised environmental statement that either omitted the North Pole proposals or said that they were an option which was still under consideration, but that is not what they have done and I do not understand that they are making any such application. That is a matter which the Committee will need to consider very seriously, whether it has got a proper environmental statement of what Mr Elvin seems now to be saying is the most likely outcome, that we will not be going to North Pole.

  20278. Committee, the third and final point, which I wish to address you on, relates to the whole question of the proportion between relocation costs to North Pole and the cost of extinguishment. It is perfectly plain that Crossrail are now going for the option which is cheapest for them as if that is the course which is the most satisfactory. We do not say that costs are irrelevant, plainly they are not irrelevant, but the Committee is charged with making sure that that there is the best possible solution in the round. Our submission is that AP3 and the Environmental Statement produced precisely that rounded package and it can be delivered very close to the figures previously envisaged, indeed possibly for a figure lower than that originally envisaged, that is the £73 million plus X. What we simply ask you to find is that there is a ready way forward in the public interest, which is the provision in AP3; secondly, that is entirely consistent with the importance not only of respecting EWS's private property rights but, perhaps more importantly, respecting the importance of freight interests and the interests of other passenger train operators, because EWS runs a chartered passenger train service from Old Oak Common; and, thirdly, respecting what the Secretary of State did assure the House on second reading, that Crossrail would not go ahead at the expense of other users of the rail system. There is a simple solution and all we are asking is that the package in AP3 be implemented in full.

  20279. Mr George: As a tail note, can I just mention three very short points? First of all, so far as safeguarding, when EWS acquired its very long lease there, only a small part of the site was safeguarded at the northern end. You were not shown that plan today, you were shown the present safeguarding and therefore, in my submission, a great deal of the force of what Mr Elvin said about EWS having acquired the site in the knowledge that it was safeguarded disappears. Secondly, so far as the marketing exercise—and you will recall Mr Elvin put it on the board—that was designed to establish what is called the "rule two market value of the site", that is in a circumstance that EWS were being displaced by Crossrail and the most that could be kept was a very small area of three sidings, what was the commercial interest in the site? It was not an intention by EWS to operate the site in that way. It appears that has been misunderstood and before the Committee today there has been an attempt to say, "Oh well, that document shows that EWS could operate from only part of the site". It does not show that at all. Thirdly, I come back to the matter of the need for certainty for EWS. Having said that, I will call Mr Smith.

  Mr Graham Smith, Recalled

  Examined by Mr George


15   Committee Ref: A231, Relative locations and sizes of Old Oak Common and North Pole Depot (LINEWD-AP3-43-05-004). Back

16   Committee Ref: A231, Extract from AP3 Estimate of Expense (LINEWD-AP3-43-05-014). Back

17   Committee Ref: A231, Amendment of Provisions 3 Environmental Statement, (Para 17.1.5 (LINEWD-AP3-43-05-009). Back

18   Committee Ref: A231, Amendment of Provisions 3 Environmental Statement, Mitigation and Residual Impacts, Para 17.5.42 (LINEWD-AP3-43-05-010). Back


 
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