Examination of Witnesses (Questions 7980
- 7999)
7980. LORD BROOKE OF ALVERTHORPE: Where
do they appear?
7981. MR MOULD: I have found them on
the departmental website, the Crossrail page.[20]
7982. CHAIRMAN: But we have not got a
website here. You have shown it to Mr Scott and Mr Monro. Is there
a passage in it that you can read on to the transcript?
7983. MR MOULD: I can tell you that paragraph
5.12.1 indicates that, if CLRL, who are envisaged as the nominated
undertaker in this document, become insolvent or look like they
are becoming insolvent, then the Department for Transport can
exercise an option to step in to acquire the company free of debt.
That is to say, the company would continue as the nominated undertaker
and would continue with responsibility for the undertakings and
assurances which fall upon the nominated undertaker as a matter
of contract in the agreement we are negotiating with these Petitioners
and with other Petitioners.
7984. CHAIRMAN: So the Government would
take over the liability.
7985. MR MOULD: That is the position.
What it actually says is that the liabilities, undertakings and
assurances, whether they be given to Parliament, whether they
are set out in contractual agreements at the time that we are
discussing here, whether they be set out, for example, anything
which is set out in the Register of Undertakings and Assurances
which is passed to the nominated undertaker for implementation,
those the Government would take on, but they would take on the
company free of any debt or any obligations with respect to debt
raised by any other TfL Group company which has been raised on
the basis that TfL will receive all the fare box revenue. It is
that which the Government, in taking back the company, would be
free from, but not free from the responsibilities under the contractual
undertakings of the kind we are talking about.
7986. CHAIRMAN: Mr Scott, I do not know
how good you are on put options.
7987. MR SCOTT: I am not an expert on
put options, my Lord, but I think you will appreciate from the
wording of the put option that it does not provide an immediate
sense of comfort. Mr Mould's team has explained to us that there
is the initial nominated undertaker and then what is envisaged
is that there are two further undertakers, one of which will be
responsible for the maintenance of the track and one of which
is responsible for the operation of the railway. Your Petitioners
are concerned not simply for what happens in the immediate construction
phase, but for the ongoing operation of the railway and the maintenance
of the mitigation, the floating bed construction, of the railway.
7988. CHAIRMAN: But it is a different
point from your settlement one.
7989. MR SCOTT: Yes, but in terms of
the liability to us, it is a liability that extends, and we have
been in discussion for how many years that we need to watch the
building, but for at least seven years beyond the construction
phase, and there are implications from the operation and continued
maintenance of the railway, so it is all three undertakers with
which we are concerned, and it is the insolvency particularly
of the construction and maintenance undertakers with which the
trustees are primarily concerned, my Lord.
7990. CHAIRMAN: You see, either we do
suggest that something should be put in the Bill or we do not.
I think putting something in the Bill is a pretty extreme option
in this case, and I do not know what we would put or suggest we
would put. The situation seems to be fairly clear and I just wonder
whether, in the light of what Mr Mould has said, I assume, Mr
Mould, once it is all built, the maintenance of the thing will
continue to be a concern to the Department for Transport.
7991. MR MOULD: Yes.
7992. CHAIRMAN: And London Underground
and everybody else.
7993. MR MOULD: Of course. I can make,
I think, two points in relation to the fresh point which has just
been made to you a moment ago. First of all, any liabilities that
arise from the construction phase, and that would obviously embrace
continuing responsibilities to monitor for the effects of ground
settlement associated with the construction of the railway, those
would fall upon CLRL, the nominated undertaker, in the terms of
the agreement we have shown you a page of, but, as regards maintenance
and operation following construction, my instructions are that
there will be similar arrangements made to those that I have shown
you under the Heads of Terms, although you will understand that,
given that we are talking about something which is not going to
happen until, at the earliest, 2017, those arrangements have not
been committed to writing at this stage.
7994. CHAIRMAN: But it is exactly that
which happened with the Underground and Metronet, was it not?
7995. MR MOULD: Yes, I think that is
right.
7996. CHAIRMAN: It was maintenance.
7997. MR MOULD: Yes, it was maintenance.
They were not a nominated undertaker in the same way. They were
a works contractor who had a contractual relationship, I think,
with Transport for London. In a sense, surely the thing to do
is to focus on what we have arranged with TfL in relation to the
construction of Crossrail to consider whether that gives a sufficient
measure of reassurance as to these matters, and I have explained
our position there. I have explained what we expect to happen
in relation to the arrangements for the operational phase, that
is to say, the permanent railway and its maintenance, and perhaps
one other point that I made to the Petitioners outside which I
have not made in terms to your Lordships is this: that the Secretary
of State, as the Promoter, has given a whole range of undertakings
both to Parliament and privately to Petitioners and the Promoter
is not relieved of those undertakings because the nominated undertaker
goes into an insolvency. Undertakings given to Parliament, such
as in relation to matters like groundborne noise where undertakings
have been given, those are undertakings that remain to be honoured
and that gives a further measure of comfort, if you will, that
feeds into the sense of reassurance that matters will be addressed
appropriately in the event that these very unlikely scenarios
that we are talking about should happen to eventuate. My Lord,
I would strongly endorse your Lordship's observation, that nothing
that you have heard, notwithstanding, as I acknowledge, the genuine
concerns of these Petitioners, justifies the extreme measure of
this Committee recommending that there should be provisions, included
in the Bill in relation to these matters.
7998. CHAIRMAN: I think the difficulty
about that, apart from precedent, is that it is very difficult
to know what to put in the Bill because there is a range of eventualities
which one needs to guard against and I suppose they would all
have to be explored.
7999. MR MOULD: Yes, quite.
20 Para 5.12, Exercise of Options, Heads of Terms
in relation to the Crossrail Project, http://www.dft.gov.uk/pgr/rail/pi/crossrail
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