Examination of Witnesses(Question 100-119)
Mrs Charles George and Miss Joanna Clayton
Thursday 30 January 2003
100. MR JENKINS: You keep referring to the RPI but
what has the price of cabbages got to do with operating something
commercially, such as a tunnel?
101. MR GEORGE: Fortunately there is a very close
link between the RPI, which you may refer to as the value of a
basket of groceries, and construction costs. That is a matter
which Mr Bates has got some tables on which he will take you to
showing that there is actually, it may be counterintuitive, a
very close comparison and the Dartford Tunnel and the Severn Tunnel
both use exactly the same RPI mechanism. Those who have investigated
the matter have decided it is the best index. In all these matters
there are about 15 or 20 indices that you can use of varying degrees
of comprehensibility but the RPI, which is a measure which is
fairly readily comprehensible, actually corresponds pretty closely
to the various costs which go into the tunnel. That is the wages
costs and also the costs of maintenance and so forth. There is
a very close correlation.
102. If we go to document C10 for a moment, because
the hon. Member raises a point which is wholly understandable
as to why one is using RPI, which has got a series of columns
and the next page, which is table C10, they show that whilst there
is not an absolutely precise parallel the RPI goes up slightly
more than the road construction cost index, it goes up slightly
less than the road/non housing index, a bit less than the non
housing construction index, but it stands as a pretty good proxy
which is why, as I say, the Department felt that it was the right
index themselves to use most recently at Dartford. Literally this
year, I think it is, it will be brought into force for Dartford
from 1 April 2003, the tolls on the Dartford Crossing are going
to have exactly the same RPI link that we have. It has been operating
on the Severn for a number of years now. That is our answer to
that.
103. The last matter on recent history is just a
mention of the 1999 Bill. The Committee will probably be aware
that in 1999 the PTA deposited a Bill in a very similar form to
the present one but which included what I may term a privatisation
provision by which they would have been empowered to transfer
the operation of the tunnel to a concessionaire in return for
a premium, which premium would then have been spent on financing
public transport measures or on borrowing to finance public transport
measures. That is precisely the sort of mechanism that the government
has employed in the case of the Dartford Crossing with effect
from 1 April this year.
104. That suggestion proved highly controversial
for Merseyside and Merseytravel has rethought the arguments, not
least in the light of debates on the floor of the House and the
views expressed, and is persuaded that, anomalous as it initially
seemed, they should retain the operation of the Mersey Tunnels
and, therefore, they withdrew that original Bill in August 2000.
I make it absolutely plain that this Bill is not intended as the
first stage of a two stage stratagem by which privatisation is
to be introduced. Indeed, in the Filled-up Bill, and the Committee
will find that at A30 page 139 ----
105. CHAIRMAN: Mr George, I think perhaps at that
point it might be a good point to adjourn until 2.15 this afternoon.
We intend to sit until about 4.30 this afternoon, if that would
be convenient to you.
106. MR GEORGE: It is an extremely good moment, sir,
because I was literally just coming to the video in one minute,
so the timing could not be better.
107. CHAIRMAN: Thank you very much.
After a short adjournment
(The Committee resumed after watching a video
about the Mersey Tunnels)
108. CHAIRMAN: Mr George, can you take over and continue
to guide us through the proceedings on behalf of the Promoters.
109. MR GEORGE; Thank you, sir. This morning you
raised a matter about exhibit B5, the question being whether in
fact there was some reserve capacity in the Queensway Tunnel,
and I gave you a not very adequate answer. Indeed, I was wrong
when I said that some of the capacity had been taken up by physical
infrastructure works. The answer is both simpler than that but
also in a way more complicated but it becomes apparent if I ask
you to turn to exhibit B12. I pause for a moment because the bundle
is not terribly easy to handle and this is an occasion when it
would be helpful to have exhibit B12 and its table in front of
the Committee.
110. What I should have pointed out to the Chairman
was that there is a difference between total flows, as we were
looking at in the graph at B5, and the key matter, which is what
is happening in the peak hour, because it is really a peak hour
problem here. If one looks in B12 under the "Capacity"
column and in the eastbound morning peak one sees that for the
Birkenhead Queensway Tunnel it has a capacity of 2,800, that being
the figure immediately above the 6,800 in heavy type. If one then
goes down to the traffic flows in the middle of the column and
one picks up Birkenhead (Queensway) just above "Total"
one sees that it is operating at 2,750 in the peak, so in other
words it is running virtually at capacity in the peak. The same
is true of the other direction. If you look to the middle column
and look at what is happening westbound, and here concentrating
on the position in the afternoon when that flow is coming back,
one sees that the figure is 2,800 for capacity just above the
6,000 and that there are 2,450 going through. So despite the fact
that there is overall some capacity, therefore, in the inter-peak,
so far as the peak position there is very little spare capacity.
That is the answer I should have given you when you raised the
matter.
111. CHAIRMAN: Thank you.
112. MR GEORGE: Secondly, this morning just before
we broke I was dealing with the question of the previous proposal
to privatise the operation of the tunnel and I was dealing with
the previous Bill. I had just mentioned that there is no sense
in which the present Bill is the first stage of a two stage stratagem
by which privatisation will follow. I had mentioned the Filled-up
Bill. Could I ask Members, please, in the A documents to turn
to A30, page 139. It is begun at page 133. This is the Filled-up
Bill — Members no doubt will be very familiar with the concept
— ie this is the Bill with a number of amendments which
the Promoters wish to become part of the Bill and invite the Committee
to approve and send forward.
113. At the page which I was taking you to, which
is page 139, the Committee will see a proposal to add to the preamble
the words which are in manuscript at the very top of page 139,
namely "and the Authority has resolved during the promotion
of the Bill for this Act that it wishes the tunnels undertaking
to remain in public ownership". That, therefore is a formal
statement. It records a resolution of the PTA in the autumn of
2002. A time will come under Standing Order 142(2) when the Chairman
is reporting back to the House on the Bill and that Order requires
you, sir, to refer to any proposed amendments to the preamble
and to give the House the ground for the amendment to the preamble.
The ground is that it records a significant event that has occurred
and forms part of the background to the Bill. It records that
important resolution whereby that decision has been made. We would
invite you, therefore, to say that is the reason why the Promoters
wish that amendment to the preamble to be made. Of course it does
not affect the substance of the Bill at all, it is not one of
the substantive provisions.
114. CHAIRMAN: It did strike me that this was really
a view of the Authority at a particular time and, bearing in mind
that the Authority will change its membership from time to time
and that this is not a substantial matter in respect of the Bill
itself, I just wondered why it should go on the face of the Bill.
It seems to me that that is slightly questionable. Is it common
for such a matter to take place, Mr George?
115. MR GEORGE: The preamble to a Private Bill will
always record matters which relate to the Promoters and so forth,
therefore some matters which may be regarded as parochial matters.
I can only say that this has been highly controversial in the
region, the whole question of the tunnels and, therefore, there
was a lot of consideration given by all the various districts
and the PTA to this matter. This resolution was passed. I know
that there are very many people in the region who would welcome
a formal record of the matter in the preamble to the Bill. Therefore,
I can simply urge you to put it there and I give you the reason
for it. At the end if it is not included but the substantive clauses
go forward then the PTA will be safeguarded, but those in particular
who felt most strongly about the matter in the past and who eventually
prevailed in the debates in the region would be disappointed if
that matter was not recorded. I do not propose to put it any more
highly than that.
116. CHAIRMAN: We hear what you say and we will no
doubt discuss it ourselves at some stage.
117. MR JENKINS: Can I ask for clarification on that
point. When you say that it will remain in public ownership, I
take it that means that it will remain in the ownership of the
PTA, not only the ownership but it will actually control it and
continue to run it?
118. MR GEORGE: That is right. The reference to "ownership"
refers to ownership and control.
119. MR JENKINS: It will not be transferred to another
public body?
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