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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