Examination of Witnesses (Questions 146
- 159)
WEDNESDAY 17 OCTOBER 2007
MR ROGER
EVANS
Q146 Chairman: I have to adjourn
the Committee in one minute because there will be a vote so I
hope, Mr Evans, you will not regard this as a personal comment
if we all get up and walk out.
Mr Evans: It will not be the first
time.
Q147 Chairman: I can assure you we
will return. Perhaps you would be kind enough, while we are waiting
for the magic moment, to tell us your full name and station in
life?
Mr Evans: Yes. Good afternoon
and thank you for the invitation to join you today. My name is
Roger Evans. I am a Member of the London Assembly, the Member
for Havering and Redbridge, which is known to most people as Ilford
and Romford in north-east London, but I am with you today because
I am chairman of the London Assembly's Cross-Party Transport Committee,
I should point out the evidence I will give you will be agreed
cross-party, rather than my own political views.
Chairman: Thank you very much for that.
The Committee is suspended, preferably for ten minutes, depending
on how quickly Members can get back.
The Committee suspended from 4.36 pm to 4.49
pm for a division in the House.
Q148 Chairman: Mr Evans, you were
about to tell us?
Mr Evans: Yes. I have a full introduction
here, which I will not burden you with as you have already got
our notes, but there are three key points which my committee asked
me to emphasise. The first one is that we have heard from the
Arbiter today about the tension over the continuing of the Extraordinary
Review. We feel the Review should continue and I am pleased to
hear that it will report on 12 November[2].
I think there may be some lessons we can learn from this, and
certainly it will be useful to have a clearer valuation around
the Metronet contracts. Secondly, we feel—and we have said
this in our report at the start of 2007—that Tube Lines
has shown that PPP can work and Metronet has shown us some of
the problems which can stop it working. I think because of that
we would not want to see the whole thing wound up.
Q149 Chairman: You would or you would
not?
Mr Evans: We would not, no. Finally,
as a plea on behalf of my voters almost, we do not feel that Londoners
should pick up the tab for this. Figures like £2 billion
are being bandied around here. Obviously there is only a couple
of ways that we could pay for that through the transport budget,
either by raising fares (which we have seen increase over the
last few years anyway) or by cutting projects to find the money,
and that would not be a suitable thing to do either given the
state of transport that we have in London.
Q150 Chairman: What do you think
of the performance of London Underground in fulfilling their responsibilities
in the partnerships?
Mr Evans: I think London Underground's
approach has been perhaps unnecessarily adversarial towards the
PPP companies. Of course, you have to remember that we started
with a situation where Transport for London went through litigation
to try to prevent this being imposed. Our committee did not take
a view. We wanted to look at what was actually going to be provided
rather than have an arcane debate about the mechanism, but this
having been imposed I think we feel London Underground could have
worked better with the PPP companies.
Q151 Chairman: In what way? To work
better is a lovely phrase, but they are all very professional.
Mr O'Toole, it seems to me, has not only got an extraordinarily
good track record but has shown himself capable of dealing with
all sorts of highly complex situations. He has been lumbered with
an arrangement that he did not negotiate. He was directly responsible
for it, but not directly involved in it.
Mr Evans: Mr O'Toole is a very
high quality public sector manager and we are very pleased with
his performance, but if you look at the situation around station
refurbishments, for example, there has been a lot of wrangling
about what should go into a station refurbishment. The way the
companies dealt with it were different. Metronet seemed to get
drawn into long, drawn out arguments, which led to delays, and
we have a situation where we have been left behind.
Q152 Chairman: But that can hardly
be laid at the door of LUL, can it really, to be honest? Part
of the problem with any customer/supplier argument surely is the
customers will always go for what they want and the supplier will
presumably have to decide whether or not they can do it f or the
price?
Mr Evans: Yes, and the customer
has a responsibility to make it very clear what they want from
the outset. Our experience is that maybe something had been added
to the specifications and minds have changed halfway through them.
I think Tube Lines' approach was only just to say, "We'll
do what you want and argue about the price afterwards," and
maybe that has been a bit more of a successful approach.
Q153 Clive Efford: Could you say
what the role of your committee is in scrutinising what is happening
on the Underground?
Mr Evans: Yes, certainly. We have
an entirely scrutineer role. We have no executive responsibility
over what happens. The executive responsibility is exercised by
the Mayor, who is the chairman for Transport for London through
the board and the Commissioner there. We have no power to have
our recommendations taken on by Transport for London, although
in fact they do take them on when they wish to and when they feel
that something we have done is useful for them.
Q154 Clive Efford: Is there a mechanism
in place for your committee to be made aware of serious deficiencies
in the performance of a contractor on the Underground?
Mr Evans: No, there is no mechanism
in place to do that. What we do receive are the minutes of the
board of Transport for London and the panels that comprise that
board, so we might see indications from that that a contractor
was failing or that something was wrong, but it is very much up
to us to go through the material that is put in front of us. There
is no formal mechanism to tell us.
Q155 Clive Efford: So we have got
a virtually bankrupt contractor rattling around on the Underground,
running two-thirds of it, and you do not know anything about it
until it hits the buffers?
Mr Evans: I think that is a fair
summary of the situation. I look back at my officers to see if
they have anything else to say, but that is a fair summary.
Q156 Clive Efford: So I cannot accuse
you of sleeping on the job while all this was going on?
Mr Evans: No. I think that would
be unfair. If we had a responsibility, or if there was a reporting
mechanism built in, then that would be the case, but Transport
for London view our committee in some ways as being adversarial
towards them and it is often a case of chasing information rather
than having it provided.
Clive Efford: A bit like the way the
Government views this Committee!
Chairman: Surely not! That must be a
misconception on your part!
Q157 Chairman: Do you think it likely
that there will be interest from other private sector companies
to purchase Metronet?
Mr Evans: We had the Arbiter in
front of us last month to talk to us about the work he is doing
and I think the feeling is that if there is value in the contracts
there may be interest from the private sector, but we need to
actually see how the administrator's valuation comes out first.
It may be that the contract is seen to lack value to such an extent
and be such a bad deal that the only -
Q158 Chairman: Most people would
regard the sort of investment they have put in and the sort of
return they have got as being not bad value. I think we ought
to be quite clear that we are not talking about a company having
failed because it was not given a very considerable amount of
leeway to make money, are we?
Mr Evans: No, we are not, and
when I talk about the value of the contracts I am talking about
a snapshot now. Would you want to come in and pick these contracts
up with a margin of hundreds of millions of pounds of debt attached
to them? Possibly London Underground may, according to the Arbiter,
owe money to the contractors, possibly not. You have heard the
range of figures talked about. So it is difficult to say in those
circumstances whether someone would want to take them over. I
have to say my view is they do not look very attractive.
Q159 Clive Efford: If there was a
private sector company or consortium interested, should there
be a restriction on the scale of the operation they take over
in the future, or do you think it should be on the same lines
as the previous PPPs?
Mr Evans: One of the problems
that Metronet had, as opposed to Tube Lines, was the size of the
task they faced. This is nine out of the 12 underground lines,
probably about two-thirds of the system underneath one heading,
and that has magnified a lot of the difficulties they have had.
I think anyone would agree that it would be better managed in
smaller chunks in future, yes.
2 Note by witness: should be 18 January 2008 Back
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