Examination of Witnesses (Questions 20300
- 20319)
20300. Two short questions: first of all, how
important is it for your business and the freight business that
there be a major rail freight site in London?
(Mr Smith) London represents the major point
of freight consumption in the entirety of the United Kingdom.
It is one of the reasons that port facilities are being developed
at Thames Haven. The Mayor recognises in his Transport Strategy
that freight needs to move into London and be consumed and would,
where possible, prefer that that is moved by rail. So work previously
done by the now defunct Strategic Rail Authority but subsequently
work by the Department for Transport has identified the need to
make sure that London can receive freight by rail. So, yes, having
facilities within the London area is crucial.
20301. Secondly, how easy is it to find replacement
sites or new freight sites?
(Mr Smith) It is very difficult. By definition,
if you are moving traffic by rail the land needs to be adjacent
to the railway line. Much land is either in someone else's ownership
or has been developed. Therefore, rail-connected land of a sufficient
size and quality to actually use as a rail freight or rail facility
is very hard to come by.
20302. Thirdly, in location terms, how good
for your business is this particular location at Old Oak Common
or the North Pole?
(Mr Smith) There is a myriad of connecting
railway lines around London that connect all the radial main lines
together and Old Oak Common or North Pole, if one is connected
to the Great Western Main Line, has the connectivity and access
to those lines. So although, from first look, you might think
this is merely a site that serves the Great Western Main Line,
in fact, by virtue of the use of other lines one can access all
the radial routes 360 degrees around London.
20303. We can see that if we put up on the screen,
please, tab 3, EWS 43.[21]
Whether one is at Old Oak Common or at North Pole but connected,
as the blue hatching shows, as is proposed by AP3, to the Great
Western Line, you there show how, from both those two sites, you
can serve, really, all directions. Is that right?
(Mr Smith) That is correct. It
is particularly important for our charter business to have access
to the mainline stations in London where much of the activity
is generated. But for other uses of the depot, such as locomotive
maintenance, for example, with the loss of the Temple Mills traction
maintenance depot locomotives in East Anglia would be able to
access North Pole by coming in on the North London Line, at the
top right of the picture, down towards Acton and then reversing
into the North Pole depot or reversing into Old Oak. I cannot
underestimate the strength and the need for having a facility
within the Central London area that has good access and connectivity
to the other parts of the railway.
20304. Could we then go back again to tab 2,
that is EWS42, and to the section at the bottom of the page where
it deals with future plans.[22]
Can we just blow up the bit on future plans, please? Can you just
quickly take the Committee through this, bearing in mind that
Crossrail is unlikely to go ahead for a few years in any event?
(Mr Smith) Yes, certainly. The
first paragraph mentions our business Axiom Rail, which works
on the charter business but also is available to undertake work
for the passenger franchises. We have been asked by bidders for
passenger franchises to bid for work that would use Old Oak Common
or a replacement facility. Unfortunately, these requests were
confidential so I am not in a position to identify the people
who asked us. However, the franchises, which were the Cross Country
franchise and the London Rail franchise, featured prominently
in the bidders request for us to use the depot for maintaining
rolling stock there. The final point really comes back to where
I was before, which is to say, given that we have had a 70 % growth
in rail freight since 1994 and given the Stern Report and Eddington,
the International Panel for Climate Change identifying a need
for a more sustainable way of moving freight then we, as the principal
freight operator in the United Kingdom, want to be in a position
to match and accommodate that growth. One of the reasons that
we have set up an open access operation in France is to enhance
the quality of service through the Channel Tunnel and bring in
some of the 60 million tonnes of cross-Channel traffic that currently
uses road, much of which is consumed in the London area, and clearly
if we can identify places where we can have rail-connected freight
rail facilities that is going to help us move that traffic from
road to rail.
20305. Chairman: Do you believe that
the perceived 40 % shortfall in freight access to the London area
cannot be met without this particular development?
(Mr Smith) It would be extremely difficult
because there are very few rail freight connected sites in the
London area. Temple Mills is probably the last major one, and
that was used for other rail activities. Yes, it is our strong
belief because—I go back to the map—of the way in
which you can connect to Old Oak; this represents a prime opportunity
for developing for rail freight whilst accommodating our other
activities.
20306. Mr George: Just under "Future
Plans" on EWS 42, the last sentence of the last paragraph
says: "It is highly likely that the workload currently undertaken
at Old Oak Common would expand in the future." Do you definitely
believe that to be the case or are you chancing your arm in saying
that?
(Mr Smith) I definitely believe it, for the
variety of reasons I have said. One is freight, two is the charter
business and three is the maintenance activity which will inexorably
rise as the amount of rail freight activity increases.
20307. Can we turn now to the North Pole depot?
We know that AP3 caters for the displacement of EWS from Old Oak
Common to the North Pole depot, and I think you have some observations
on that matter to the Committee
(Mr Smith) I think the key point is we were
taken a little by surprise the day that the Secretary of State
announced publicly that there was a revised Depot Strategy, part
of which would involve EWS moving to North Pole. We had not had
any kind of detailed discussions with the Promoter at that stage
and our initial reaction, I think, probably through being taken
by surprise, was slightly adverse very superficially. The two
sites, as we have seen earlier on, are of a different shape and
size.
20308. Can we put up EWS44, which is tab 4,
which we looked at in opening?[23]
You make the point on different size. Can you just elaborate on
that?
(Mr Smith) As we have seen earlier,
Old Oak Common to the left is a short, fat site, which is more
easy to manage than the long, thin site, which is the North Pole
depot to the right. So the immediate reaction, before getting
into the detail, is these things are not really going to work
together. However, working closely with the Promoter and his team
and using our own staff and staff that we jointly engaged from
consulting companies we then looked at North Pole and said: "Yes,
you can make that work." The one thing that it really needs
is a connection to the Great Western Main Line, otherwise one
does not have connectivity that we described earlier, but providing
we have that then actually the kind of work that we do at Old
Oak Common and anticipate doing at Old Oak Common between now
and when Crossrail would require us to leave can be fitted into
the North Pole Depot and can be accommodated at the North Pole
Depot, albeit that we do need to make some changes to the depot
that, at the moment, is configured to maintain 16-carriage-long
Eurostar sets, which are slightly different beasts to the kind
of activity that we undertake.
20309. What is the sort of work that has to
be carried out at North Pole and which leads to this bill estimate
of £73 million?
(Mr Smith) The Promoter actually sets out in
AP3 the kind of works that would need to be done in terms of infrastructure
works, but, essentially, we have to make sure that there is a
facility where we can maintain locomotives, that there are facilities
where we can stable and maintain the charter fleet, and places
where we can locate the Network Rail crane, the rail-grinding
train and any trains for engineering and infrastructure works.
So the North Pole Depot, electrified to over 25 kilovolts overhead
and the third rail, this is probably something that we do not
need but it is there. We need to have cleaning facilities that
are appropriate for what we want to maintain rather than the Eurostar
sets.
20310. If we put up on the screen tab 5, exhibit
EWS45.[24]
We have there got a list of the works under the heading "North
Pole Depot" which are contained in AP3, which are designed
to make the North Pole site suitable for your occupation. Is that
right?
(Mr Smith) Most of these are a
range of infrastructure works on the ground in terms of reconfiguring
the track and the layout, which at the moment is focused on taking
Eurostar trains on to the West London Line and thence to Waterloo
Station. These works here, including works we no longer think
are necessary, primarily focus on connecting to the Great Western
Main Line and undertaking some internal alterations as well. In
addition, we would need to do work on the sheds and the facilities
to make them suitable for accommodating the EWS kind of work,
but it is that area (which I know we are going to come on to)
where we have looked, looked again and looked again, after our
conversations with the Promoters, to see how we can bring the
construction costs down from the original estimates.
20311. We will come back to that matter in a
moment. Can we just deal with the question of ongoing costs. Why
will North Pole be more expensive year-by-year for you to run
than Old Oak Common?
(Mr Smith) If you think that the costs for
North Pole, really, divide into the construction costs and the
additional running costs, a long, thin depot is not ideal operationally
and will need more staff to operate it than a short, fat site.
We have talked briefly earlier about the fact we would need to
pay rates to the local rating authority at North Pole, whereas
at Old Oak Common they are paid by our landlord Network Rail (which
dates back to the 1994 privatisation) and also the additional
utility costs. There, there is a bit of a trade-off. Yes, we could
strip the site completely of the kind of facilities that were
there to support Eurostar, which would reduce the running costs,
but that would be a fairly expensive, up-front piece of capital
expenditure, and, again, I think we are conscious (the Promoters
remind us when we are doing this work) of the budgetary constraints.
So, on balance, we said: "Okay, we will keep the, perhaps,
over-specified, in some places, facilities and take on board the
additional running costs instead".
20312. Staying in EWS45, tab 5, we can move
on to the Environmental Statement. If we start by looking at page
164, there is a comparison of the previous and the alternative
Depot Strategy, and then in 16.3.3 we can see expressly referred
to as the second bullet point: "Provision for EWS facilities
at North Pole".[25]
That is the matter the Secretary of State announced and what was
included in AP3.
(Mr Smith) That is correct.
20313. Over the page to page 171, again, that
proposal is referred to. Over, again, to page 181, and the passage
I referred to in opening, one sees the combined effect on employment,
and they are anticipating that you will be displacing, EWS, 40
jobs (that would go to the North Pole Depot, therefore that is
not a loss to the scheme) and there will be the new jobs. Do you
find anywhere in these published documents any suggestion that
the North Pole Depot is, so to speak, an add-on function which
may or may not be implemented?
(Mr Smith) No, it appears to us to be a fairly
fundamental part of AP3 described in 18.2.2 on page 185. Clearly,
the Promoters have thought about this in some detail and after
the initial shock of just being told: "You are going there"
and extensive conversations and discussions with Promoters, yes,
we are prepared to move and we understand that we can make the
site work for us.
20314. If we move on to page 185 of the exhibit,
in paragraph 18.2.2 we see a list of the alterations required
to accommodate EWS, and those were matters which were then costed
by Crossrail.[26]
(Mr Smith) That is correct.
20315. If we could then move please to tab 6
and the estimate of costs, which is the £73 million there,
am I right in saying that Crossrail have told us that that does
not include any element of ongoing costs?[27]
(Mr Smith) That is correct.
20316. That is what I referred to as the "add-on
£X" which has to be added to the £73 million. We
are looking at item 3 at the bottom of the page, giving the total
of £73 million. Correct? The £73 million is just for
permanent way, earthworks, building, signalling and associated
utility works. Is that right?
(Mr Smith) That is correct.
20317. Then, if we turn the page, item 4 deals
with land at the Clacton-on-Sea depot, in Tendring, and then we
have the note, "If the revised Depot Strategy is accepted,
this would result in a saving of £105m".[28]
Is it your understanding that that £105 million allows for
the spending of the £73 million on the North Pole?
(Mr Smith) That is my understanding.
20318. Could you now tell the Committee about
the work which you have done to try to bring down the costs of
relocation to North Pole, and I think for this purpose we need
tab 7, EWS/47.[29]
First of all, column 1, estimate of expense, that shows the £73
million which was in the deposited Bill, and we know that they
put in nothing for ongoing costs, which is my `X' which has to
be added on, and that is why they gave £73 million which
should really be £73 million plus X. Then can you just explain
column 2?
(Mr Smith) Yes, three groups of
consultants were involved in getting into a detailed estimate
of the costs of amending the North Pole Depot. Crossrail retained
EC Harris to look at the depot, mainline and internal track works,
and that consulting firm came up with the figures for the depot,
for the permanent way and additional costs for project management
contingency. Crossrail also retained Mott MacDonald Systems who
looked at the costs for signalling and telecommunications, and
they are in boxes entitled "Network Rail Works", and
then they added project management costs and again another element
of the contingency, 50% contingency applied by both Messrs Harris
and Messrs Mott MacDonald. We retained Atkins to just review much
smaller-scope works that we felt were needed to be done within
the North Pole site and also what it would actually cost to move
the equipment that we have at Old Oak across the line. It seemed
pointless to buy new equipment if what we already had was fit
for purpose, and they are the figures that we have included in
the third block.
20319. That then leads one to the £72.3
million which is virtually the same as the £73 million in
the deposited parliamentary estimate, and indeed that may have
been how Crossrail got to their figure, but, at any rate, so far
as the £73 million is concerned, that is not in issue, is
it? That has now been worked out and one can see how one reaches
£73 million?
(Mr Smith) That is correct, all at 2002 prices,
as the note at the bottom says.
21 Committee Ref: A231, Plan of main railway lines
accessible from Old Oak Common (LINEWD-AP3-43-05-003). Back
22
Committee Ref: A231, Current and Future Use of Old Oak Common
(LINEWD-AP3-43-05-002). Back
23
Committee Ref: A231, Relative locations and sizes of Old Oak
Common and North Pole Depot (LINEWD-AP3-43-05-004). Back
24
Committee Ref: A231, Bill and Envvironmental Statement extracts
detailing work at North Pole Depot (LINEWD-AP3-43-05-005). Back
25
Committee Ref: A231, Amendment of Provisions 3 Environmental
Statement AP3, The Alternative Depot Strategy, Para 16.3.3 (LINEWD-AP3-43-05-008). Back
26
Committee Ref: A231, Amendment of Provisions 3 Environmental
Statement AP3, Permanent Works, The Revised Scheme, Para 18.2.2
(LINEWD-AP3-43-05-011). Back
27
Committee Ref: A231, Extract from AP3 Estimate of Expense (LINEWD-AP3-43-05-014). Back
28
Committee Ref: A231, Extract from AP3 Estimate of Expense (LINEWD-AP3-43-05-015). Back
29
Committee Ref: A231, Comparison of Costs for Old Oak Common Relocation
to North Pole Depot (LINEWD-AP3-43-05-016). Back
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