Select Committee on the Crossrail Bill First Special Report


CHAPTER 5: RAILWAY INTERESTS PETITIONERS

THE HOUSE OF COMMONS REPORT

205.  In Chapter Nine of their Report, the House of Commons Select Committee summarised the petitions they had heard from rail freight groups and came to the following conclusion:

206.  They went on to say that they were concerned over the uncertainty surrounding the Access Option and that they looked "to the Committee in the House of Lords to ensure that the Access Option and any other remaining issues relating to the freight industry are adequately evaluated"[32].

THE ACCESS OPTION AND THE RAILWAY BILL CLAUSES

207.  The Bill, as it stood before the House when we were in session, contained provisions which, if enacted as a whole, would modify the duties of the rail regulator, the ORR, in order to ensure the operation of Crossrail and provide sufficient statutory powers to ensure the running of Crossrail in the event that an appropriate access agreement was not available.

208.  Concern was expressed over these clauses before the House of Commons Select Committee. The Promoter, however, has made clear throughout the Bill process that the use of standard regulatory and industry mechanisms was preferred and so an access option was applied for.

209.  Following the necessary industry-wide consultation the ORR issued a provisional decision on the access option on 3 March 2008. After that provisional decision, the rail industry and other concerned parties had a further opportunity to make representations to the ORR before their final decision was issued on 14 April 2008.

210.  We do not intend to outline the ORR's decision on the access option here. It can be found in full at: http://www.rail-reg.gov.uk/index.php. Suffice it to say that the option requires Crossrail to meet a Public Performance Measure (PPM) of 92% and does not commit Crossrail to building any specific infrastructure to achieve this output. Public Performance Measure (PPM) is the standard measure used to determine the performance of Britain's passenger railways. It combines figures for punctuality and reliability into a single measure of the percentage of scheduled services running correctly to timetable. It covers all scheduled services, seven days a week and is measured at the final destination. If Crossrail fail to meet this PPM the regulator can remove some of the paths allocated to them.

211.  In response to the ORR's decision on the access option the Minister made clear in her statement of 18 April (following a policy statement made on 11 April 2008) that the Government's intention was to cut back the powers sought in the Bill. The statement explained that:

"Ministers wish to make clear their intention to bring forward amendments at subsequent public bill stages to:

(a)  delete clauses 23 to 34 from the Bill;

(b)  make provision to address an issue relating to blocking rights during construction; and

(c)  make provision to require the ORR to report on how it is and how it has and how it intends to exercise its functions as they concern Crossrail" [sic.].

212.  The amendments, as public provisions, were to be brought forward at the public bill stages in the House once this Committee had reported the Bill. However, drafts were produced for the benefit of Petitioners.

213.  It is fair to say that these amendments went some significant way to allaying the concerns of Petitioners before this Committee. However, some issues remained outstanding and below we detail some of the cases of the Petitioners we heard.

Jean Lambert MEP and others; and BAA Ltd

214.  Ms Lambert's petition raises a number of issues and objects to the Crossrail scheme on the basis that it should be significantly extended so that it provides a range of services not currently provided for in the Bill. We declined to hear any detailed argument on this wide-ranging proposal since it is outside the principle of the Bill.

215.  The Petitioner also specifically raised the issue of capacity on the Great Western Main Line and we heard argument on this which can be found at paragraph 8268 onwards in the transcript. The Petitioner put forward several ideas for increasing capacity on the line, though none were designed in any detail or costed, and the Promoters explained to us why some of these proposals were not workable (para 8321 onwards)

216.  However the Petitioner did put forward one proposal that attracted our attention—the suggestion that there might be a line starting at Heathrow and going to the west, following the path of the existing 'Colnbrook branch' (previously the 'Staines West Line') which is currently used for freight, to join the Great Western Main Line with a western curve. We were surprised that no west linking line is to be provided from Heathrow and that it is proposed that Crossrail trains will not stop at Heathrow Terminal 5.

217.  In response to the Petitioners' presentation the Promoter explained that providing such a west linking line would be expensive and that there would be difficulties in constructing the line as it would traverse an existing water works and would require a connection to be made from the end of the Terminal 5 platforms at Heathrow through the end of the airport facilities to join up with the 'Colnbrook branch'. The Promoter's submission was that there was not enough traffic on offer at present to justify such works but that if that situation changed in the future it would be open to BAA to provide such a linking line. The Promoter also mentioned another scheme currently being promoted by BAA—the Air Track scheme.

218.  BAA did not appear before us but on Wednesday 30 April the Promoter read out a statement, containing the wording of the undertaking agreed between the parties, on their behalf, concerning works on the Piccadilly Line and the Heathrow Express line. The Promoter also recalled Mr Berryman on this date to deal with the issue of the Heathrow Western link in more detail

219.  Mr Berryman explained which trains will serve Heathrow's Terminals when the Crossrail line is up and running. Crossrail services will subsume the current Heathrow Connect Services. The Heathrow Express service will run into the central terminals and then on to Terminal 5. Crossrail will run to the central terminals and then on to Terminal 4. Passengers will therefore need to change at the central terminals as necessary to take either a Crossrail train or a Heathrow Express train to their final destination. Whilst this may not appear an entirely satisfactory arrangement we recognise that it is what BAA have agreed with Crossrail and we further recognise that it is impossible for Crossrail to serve both Terminal 4 and Terminal 5 with the current layout of buildings at the airport.

220.  Mr Berryman also explained in more detail the west facing connections that Crossrail had considered and rejected. A west facing curve at Airport Junction had been considered and rejected because it would be impossible to fit in due to the constraints of the site and the geometry of the lines (para 9584). A loop line via the existing Colnbrook branch was also considered. Again this option was rejected because of the geometry of the line and the need to traverse a group of lakes and the treatment works of the Three Valleys Water Company.

221.  Mr Berryman further outlined the scope of BAA's proposed Air Track scheme which would provide for a southern link to Staines from Terminal 5. Trains would go from Staines to Guildford, Reading and Waterloo and there would be two trains an hour from each of those originating points. The station at Terminal 5 has been built with platforms to accommodate this service and BAA have already committed the necessary funds to obtain consent for this scheme through a Transport and Works Act procedure.

222.  We recognise the Promoter's arguments and the difficulties that would be involved with providing a west facing connection from Heathrow. We further recognise that Air Track, if built, will provide for much improved access to Heathrow's Terminal 5. Whilst we do not require Crossrail to provide a west facing connection at this time we do consider that such a connection would be desirable and we hope that in the future it might be provided for. We thank the Petitioners for bringing the issue to our attention.

Association of Train Operating Companies

223.  The Association of Train Operating Companies (ATOC) appeared before the Committee on 22 April. Two main issues remained outstanding following ATOC's appearance: an undertaking to deal with the issue of compensation, and an undertaking to deal with the issue of access to depots and other stabling. In relation to the former, ATOC had been concerned to enshrine the principles of no-net loss/no-net gain, and in relation to the latter, ATOC were concerned that access to depots at Ilford Yard and stabling at Plumstead Yard, might be affected, both by the Crossrail works and by its inter-relationship with other proposals, such as Thameslink.

224.  We were pleased to receive a letter on 7 May which confirmed that agreement had been reached between the parties on these issues. The Promoter offered undertakings on compensation, Ilford Yard and Plumstead Yard, which were accepted by the Petitioner, and these will now be entered onto the Register of Undertakings and Assurances.

Network Rail Infrastructure Ltd

225.  Network Rail appeared on Wednesday 30 April and raised the issue of infrastructure management for the central tunnel section of the Crossrail route.

226.  The Petitioners were seeking an undertaking that would guarantee that they would be infrastructure manager of, and hence have responsibility for and control over, the operation and maintenance of the Crossrail system from end to end, including the central tunnel section.

227.  The legislation here is complex. The requirements of the Railways Act 1993 are overlain by two sets of regulations which transpose EU Directives—the Railways and Other Guided Transport Systems (Safety) Regulations 2006 (the ROGs) and the Railways Infrastructure (Access and Management) Regulations 2005. The effect of the legislation is that a body meeting the definition of infrastructure manager under the ROGs is not necessarily an infrastructure manager under the 2005 Regulations.

228.  In the case of Crossrail we were told by the Promoter that "it is agreed that Network Rail should be infrastructure manager for the purposes of the ROGs; that is not in dispute" (para 9204). Network Rail will therefore be the infrastructure manager of the surface Crossrail lines and the infrastructure manager under the ROGs of the central tunnel section.

229.  The Petitioners' concern was that they might not be appointed infrastructure manager under the 2005 Regulations for the central tunnel section which will not be on Network Rail's network.

230.  The Petitioners produced an email sent to them by Transport for London on 9 April which set out TfL's bid for securing greater control over the infrastructure for which it is providing significant funding. In the email TfL accept that Network Rail should be the infrastructure manager under the ROGs but suggest that "other services could be unbundled with for instance maintenance being contracted directly by TfL or through Network Rail … The nature and extent of Network Rail's role would be controlled through commercial negotiations as would its costs and performance". The Promoter stressed that this email represented TfL's bid and not departmental policy.

231.  The Petitioners made clear that they were unsure whether they could operate the safety regulations properly without also being given responsibility for operating and maintaining the railway. In a note to us the Promoter also made clear that Network Rail is under no obligation to accept arrangements that it considers would:

232.  We recognise that the three delivery partners (the Secretary of State, TfL and Network Rail) need to reach agreement on the identity of the infrastructure manager(s) within the framework of the legal and related safety requirements to ensure that the Crossrail service can operate seamlessly over three networks (the Great Western Main Line, the Great Eastern Main Line and the central tunnel section). There is a proper negotiating process to be concluded and it would be improper for this Committee to require the Promoters to give the Petitioner the undertaking they seek and so tie the Secretary of State's hands in this matter. We hope that negotiations will be brought to a satisfactory end before long.

233.  However, we take this opportunity to state that we would be concerned if more than one body was to be given infrastructure management responsibilities. We would be further concerned if Network Rail were required to be infrastructure manager for the purposes of the ROGs in the central tunnel section without also being given responsibility for the operation and maintenance of the railway in this section.

Rail Freight Group and other rail freight petitioners, and English Welsh and Scottish Railway Ltd

234.  Lord Berkeley presented the petitions of six rail freight Petitioners: the Rail Freight Group, Freight Transport Association, Hutchinson Ports UK Ltd, Quarry Products Association, Freightliner Group Ltd and Mendip Rail Ltd. We are grateful to the freight Petitioners for organising themselves and presenting their cases efficiently and clearly.

235.  The Petitioners told us that they welcomed the ORR's decision on the access option and saw it as being "fair and reasonable and in line with its duties under Section 4 of the 1993 Railways Act" (para 8653). They further recognised that the Promoters had "come a long way since the start of the process in Parliament" and paid tribute to "their willingness to make changes as a result of the representations made by the rail freight industry" (para 8654).

236.  However, the Petitioners had a few outstanding issues to raise, mostly related to infrastructure works. The Petitioners asked us to require the Promoters to commit to building several specific pieces of infrastructure that would be beneficial to freight traffic. The Promoters noted that they had already committed to building the Acton dive-under[34] and argued that they should be able to retain some flexibility as to what infrastructure is built and noted that the ORR's decision on the access option did not require them to build any specific infrastructure, but was based on output and required them to meet a Public Performance Measure of 92%. They argued that detailed design had not yet been undertaken and it might transpire that certain works would not be needed. In this event they did not want to be already committed to spending funds on expensive, unnecessary infrastructure. The Petitioners also asked us to ensure that the capacity and gauge upgrade works to enable two-way freight traffic on the Ipswich-Peterborough-Nuneaton corridor are completed before Crossrail works on the Great Eastern Route begins. On a different note, the Petitioners asked that clauses 40-41 be removed from the Bill.

237.  We recognise the importance of rail freight to the UK economy, as indeed does the Promoter, who told the Petitioner that "there is no issue between us over the importance of rail freight and making appropriate provision for growth in rail freight" (para 8677). Both Promoter and Petitioner are in agreement that it is necessary to balance the various competing interests seeking to use the rail infrastructure and that the appropriate means to do so is via the normal regulatory processes for the rail industry.

238.  We do not require the Promoter to commit to building the specific infrastructure works as requested by the Petitioners. Doing so would deny the Promoter the understandable freedom they argue for and could lead to a waste of funds. Furthermore we do not wish to modify in any way the decision of the independent rail regulator. However, on Tuesday 6 May we did ask the Promoter to give an undertaking to give further comfort to rail freight Petitioners. The Promoter agreed and on Wednesday 7 May gave an undertaking in the following terms:

    "I undertake on behalf of the Promoter that any subsequent decisions by the Promoter not to carry out all of the proposed infrastructure works authorised by the Crossrail Bill will be taken on the basis that, as determined by the Office of Rail Regulation using the Crossrail model, it should not have an overall negative impact on the capability of the existing rail network to handle the current and forecast growth in rail freight traffic to 2015—as accepted by the ORR in its decision dated 14 April 2008 to grant an Access Option to Crossrail".

239.  In response to the Petitioners' other concerns we accept the Promoter's argument that the Peterborough-Nuneaton works are not required in order to make Crossrail workable and that they are the subject of Transport Innovation Fund funding and as such that it would be inappropriate for us to make them the subject of a Crossrail undertaking.

240.  Clauses 40-41 were raised by these Petitioners and also by English Welsh and Scottish Railway Ltd (EWS). EWS accepted that there was a need for clause 40, which has the specific function of providing a mechanism for reconciling disputes in the case of certain railway assets, but argued that clause 41(3) was unnecessary. Clause 41(3) gives the Secretary of State the power, on request or otherwise, to direct the arbitrator as to what result the arbitration is intended to achieve. The Petitioners argued that an arbitration clause could adequately replace clause 41(3) and looked to us to require its removal from the Bill.

241.  In response to this the Promoter provided us with a note which explained the purpose of clauses 40 and 41[35]. The purpose of clause 41(3) was explained in this note in the following terms:

    "The Secretary of State may … under clause 41(3), specify the results to be achieved by arbitration … This is to avoid the possibility that the result of the arbitration frustrates the ability of the Nominated undertaker to deliver essential Crossrail works, which have been authorised by Parliament".

242.  The note went on to explain that the Promoter is clear that "it does not intend that clauses 40 and 41 will apply to railway operators on the Network Rail network". This is because clause 40 should not supplant or override the allocation of access rights under the Railways Act 1993 and clauses 40 and 41 do not directly empower the Secretary of State in making a direction to modify any access arrangement directed by the ORR under the Railways Act.

243.  The note gave an example of when the powers contained in clause 41(3) might be used. The example involved the Crossrail works as Farringdon station which will involve a "complex interface with other works, such as Thameslink, and non-regulated asset controllers, such as London Underground".

244.  The Promoter mentioned in their note that they were "considering whether it is appropriate to, during the later stages of the Bill process, make it explicit that clause 40 or 41 should not be invoked by either party where the matter may be referred to the ORR for determination in accordance with its statutory duties or functions". We would strongly support such a move and believe that it would give further comfort to those Petitioners who raised the issue.

245.  English Welsh and Scottish Railway Ltd also asked us to require the Promoters to commit to building some specific infrastructure, and we are not acceding to that request for the reasons specified above, and raised an issue over compensation in respect of losses incurred during construction.

246.  The Network Code is the financial mechanism that generally operates between railway operators. As the Petitioners explained to us, the standard procedures provide for certain circumstances in which no compensation is payable. The Petitioners argued that those procedures "were never intended to address the construction of a new railway and railway of the sort which will be involved in the construction of Crossrail" and that as a consequence of this "one would expect there to be special provision made to ensure that all losses lie with the Promoters rather than some of them being picked up by the railway operators" (para 9683).

247.  The issue is this—the Network Code provides for compensation for losses arising from a 'network change' and for losses arising from a lesser change that lasts over six months (even if it does not meet the definition of a network change). The majority of Crossrail works will involve changes "in or to any part of the Network (including its layout, configuration or condition)". As a result these will be 'Network changes' for the purpose of Part G of the Network Code and the compensation mechanism in Part G will therefore be engaged in respect of the majority of the works. However, the Petitioners wanted to be compensated for all losses arising from construction—in other words they wanted an extension to the industry mechanism.

248.  The Petitioners accepted that over 80% of the losses that they might incur during construction of Crossrail were recoverable under current railway industry provisions and this figure is likely to prove conservative. In the circumstances we are not minded to require the Promoter to pay compensation for all potential losses as the Petitioners requested us to do. Industry mechanisms should be used and we believe that those mechanisms provide adequate protection to the Petitioner.

249.  Furthermore, we note that a consultation process is currently underway at present within the industry relating to Part G of the Network Code and that it is open to the Petitioner to make representations.


32   House of Commons Select Committee on the Crossrail Bill, First Special Report, Session 2006-07, HC 235-I, paras139-141 Back

33   Note from the Promoter circulated to the Committee on 7 May 2008-see Appendix 7 Back

34   The dive-under is, in effect, a short tunnel taking Crossrail passenger trains from Maidenhead and Heathrow towards Paddington under the tracks which freight trains use to access Acton Yard. This will enable freight trains to leave the yard and proceed towards Reading on the down relief line without impeding passenger trains on the up relief line. Back

35   Note from the Promoter circulated to the Committee on 1 May 2008 Back


 
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