Terms of, and amending other contracts because of, Crossrail access contracts
( ) Subsection (4) applies only where a compensatory arrangement has been reached, which is enforceable by the Office of Rail Regulation..
The amendment is designed to ensure that there is a fair deal for those potentially or actually adversely affected by the terms of clause 28. The clause gives the rail regulator the power either to direct a facility owner to enter into an access contract with a prospective Crossrail passenger service provider or to amend existing access contracts that he may have at the request of the would-be service provider. When doing that, the Office of Rail Regulation is not allowed to make the parties to the affected contract change the amounts payable under that contract. That means that a situation could arise whereby a facility owner is forced to allow a third party far greater access to his facility than before, but without the commensurate financial compensation or reward. In other words, it seems that the power granted under the clause allows the possibility that the facility owner will give something away and make extra provision, yet receive nothing in return.
I grant that subsection (5) gives the ORR the power to review the appropriate access charges, but the key point is that the financial provisions of the contract previously agreed to by the parties cannot necessarily change. When the parties are forced by the ORR to alter the terms of the contract, it is likely that one of them will suffer financially. For that loss, there ought to be a compensation process provided for by the ORR.
Elsewhere in the Bill, compensation is offered to parties adversely affected by powers granted to the Secretary of State and the rail regulator. For me, it follows that those who are forced to amend existing access contracts should also be entitled to the appropriate financial reimbursement and compensation. That strikes me as a just and responsible thing to do.
Mr. Harris: Clause 28 deals with two matters. The matter relevant to the amendment is that the clause secures the amendment of any remaining conflicting access rights when they are outside the central tunnel area and are applied for in order to complement Crossrail passenger services. To explain that further, it is possible that a prospective Crossrail operator could not reach an agreement on access rights with a facility owner outside the central tunnel area. They will therefore ask the ORR to direct proceedings under section 17 of the Railways Act 1993. When that procedure is invoked, there may be existing access contracts that conflict with the principal Crossrail passenger service, in which case the ORR needs the power to amend them.
The clause does not permit amendment to access charges without undertaking an access charge review under the 1993 Act. That would be the appropriate rail industry mechanism for ensuring that there is a resetting to the correct access charge payment between the parties affected by the clause.
The amendment would interfere with the ORRs ability to amend the access charges. That would be a perverse result for the holder of access rights that are being amended as a consequence of Crossrail contracts. If compensation is appropriate, it can be considered separately. There does not need to be a power under the Bill to provide for it. We have given undertakings to the industry during the Select Committee stage of the Bill that we will, wherever possible, use industry mechanisms, which have associated compensation arrangements. That is the preferred solution of the industry. Where we need to adapt those mechanisms, we will seek to agree suitable compensation provisions with the ORR. I hope that that satisfies the hon. Member for Wimbledon enough for him to withdraw the amendment.
Stephen Hammond: I have listened intently to the Minister all afternoon, but I must have missed something in those remarks. I do not understand how the amendment would affect the ORRs powers of financial compensation. At the moment, the ORR is not allowed to make the parties to the affected contract change the amount payable under that contract. As the Minister says, there is a power to review the appropriate access charges, but I do not understand how the amendment affects that. I think that it would give more protection to railway facility owners. From what the Minister says, I am still not clear how it would diminish that. I would be grateful if he could clarify that point.
Mr. Harris: My understanding is that the effect of the amendment would be to interfere with the ORRs ability to conduct an access charge review, where it is necessary as a consequence of the amendment of access contracts that conflict with the Crossrail service contracts.
Stephen Hammond: I thought that this was going to be relatively straightforward. Although the amendment may place another obligation upon the ORR, I cannot understand how it conflicts with the obligation that is already there. Will the Minister have another go at trying to reassure me that this is something that detracts rather than is additional? Looking at the wording of my amendment, and from my understanding of the clause, notwithstanding his explanations, that is exactly what the amendment does. It does not detract, but is additional.
Mr. Harris: The hon. Gentleman is right that it is additional, but I do not see the need for it, given that the industry measures that we are committed to using as part of the process for resolving those conflicts already exist and our undertaking that industry processes will be preferred to putting them on the face of the Bill.
Stephen Hammond: Yes, we are, and it is almost time for everyone to go and have a cup of tea. [Hon. Members: Hear, hear] I think that that is the most animated that the Labour Members have been, and I do not blame them; this is a pretty technical Bill.
I would like the Minister to say that he will write to me and really clarify that point, and then I will be
Mr. Harris: Of course, I am more than happy to write to the hon. Gentleman. However, now that inspiration has arrived, I shall add to my previous comments. The compensation payable between Network Rail and train operators is dealt with separately to arrangements for compensation under the normal industry processes to which I have referred.
Stephen Hammond: Not this year, but maybe soon. I would be grateful to the Minister, not withstanding that last piece of inspiration, if he would commit to writing to me about that, because it is an important amendment and I am not sure that he has really satisfied my doubts about it. I am happy, however, to ask the Minister to write to me, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 ordered to stand part of the Bill.
Clause 29 ordered to stand part of the Bill.
Further consideration adjourned.[Mr. Watson.]
Adjourned accordingly at twenty-seven minutes to Four oclock until Tuesday 27 November at half-past Ten oclock.
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