Select Committee on the Crossrail Bill Minutes of Evidence

Examination of Witnesses (Questions 8740 - 8759)

  8740. The Rail Freight Group, your organisation, made detailed representations to the regulator; you personally appeared with Mike Garratt at the hearing convened by the Regulator?

   (Mr Bennett): I did, my Lord Chairman.

  8741. And the rail growth issues and then the capacity implications for Crossrail were the second issue addressed at the hearing?

   (Mr Bennett): They were indeed, my Lord.

  8742. The freight growth issue was the first part of the second issue; the capacity implications were the second part of the second issue. We have the transcripts, as do their Lordships. Can we just look at what the provisional decision said, looking at the issue of concern to the Rail Freight Group (exhibit 05-086), the bottom two thirds of the page, capacity and performance implications of the TAO.[8] We can see there, paragraphs 24 down to 27, the issue which was raised by the industry of capacity and infrastructure enhancements, because that is what we are really talking about today, should we be required to carry out certain infrastructure enhancements, and we see at paragraph 25 that that was an issue that was raised, and it is said by the ORR, and this is the provisional decision: " ... although this infrastructure is contained within the Crossrail Bill, there is no certainty that the Bill will receive Royal Assent ... Even if it does, it grants powers, not obligations, ... no certainty that Crossrail will construct all the enhancements for which it gains powers. No enhancement is yet funded until the Bill is enacted".

  8743. Paragraph 26: "We considered whether we should link the ability to exercise the rights to the completion of specified infrastructure enhancements", so there is absolutely no doubt at all that the ORR asked the question: "Should we give this level of fixity to meet the concerns of the freight industry"? It was addressed as a clear issue.

   (Mr Bennett): My Lord, I cannot disagree with the interpretation of those paragraphs. Subsequently the ORR does, of course, retain the right to vary its input assumptions in circumstances --

  8744. Sorry, can we take it a step at a time? I am going to come on to final decision, so do not worry, we are going there. Can we look at the rest of paragraph 26, since we have agreed so far? "We have decided not to take this approach because of the general lack of knowledge of the likely final technical specifications for the project. We have therefore chosen to concentrate on the outputs from the project ... rather than inputs". Then the next page, paragraph 28, at the top: "For that reason, we have decided that the use of the access rights in the TAO [the access option] will be made conditional on an objective test", and that includes, we see below, existing rights of freight operators and freight growth, little (b) and (c). This was the provisional decision on 3 March, and the parties then were given further opportunity by the ORR to raise points concerning this, were they not?[9]

  (Mr Bennett): Yes.

  8745. And your freight group, through Lord Berkeley, sent a letter with two pages of representations and we can go, please, to that letter which you wrote, 17 March (exhibit 04B-005).[10]

  8746. CHAIRMAN: We have certainly not seen this before.

  8747. MR ELVIN: Which, my Lord?

  8748. CHAIRMAN: Lord Berkeley's letter.

  8749. MR ELVIN: Very well. We will make sure copies are made available. It is a two-page response to the draft decision, and we see the general welcoming of that decision because, indeed, that decision amounted to quite a considerable number of concessions in favour of the freight industry over and above what was being offered in the original application, did it not?

   (Mr Bennett): Yes.

  8750. And we see in paragraph 3 recognition that at the hearing the Department for Transport had accepted the rail freight growth figures that you had advanced to 2015. There was no dispute between us at the hearing about the growth figures.

   (Mr Bennett): No, sir.

  8751. And then it says a number of issues remain. Can we just look at "Performance" at the bottom, paragraph 6? "We have concerns that, although the timetable has been designed around specific infrastructure enhancements, there is no obligation on Crossrail to build them". So you make the point that there is no obligation to construct the infrastructure. "Without them, the number of paths available could reduce significantly. We therefore welcome the ORR requirement for an objective test that Crossrail trains must be able to operate alongside other passenger and freight trains to a 92 per cent reliability ... before such new services are permitted to operate". And you say there should be a comparable measure of freight performance. So the response of your group to the ORR's solution to the issue was to accept it. You welcomed the objective performance test as a means of meeting your concerns. You did not dispute it. That is right, is it not?

   (Mr Bennett): That is correct.

  8752. And, therefore, if we look at the final decision of the Office of the Rail Regulator on 14 April and look, firstly, please, at page 14, which is exhibit 05-109, we will see starting at paragraph 67 the ORR's proposed decision going over to the next page, paragraphs 67-71, and there the ORR repeats what was in the provisional decision at paragraphs 24-28 that we looked at earlier.[11] So the ORR says: Well, this was my provisional decision. The ORR then goes through the representations that were received and comes to the final decision on page 111 of the exhibit, starting at paragraph 77. The ORR, therefore, has taken account of such representations as were made, which includes your welcoming of the objective test, and approves the provisional decision for the objective test and says at paragraph 78: "We confirm that the use [under the access option] will be made conditional on an objective test covering both capacity and performance ... In particular, we will need to be content with a number of input assumptions,.." and they are spelled out in detail which include in a little more detail protection of not only current freight services but an allowance for growth to 2015 on the basis there was an agreed figure.

  (Mr Bennett): That is correct.

  8753. If we go to the next page --

   (Mr Bennett): Sorry, but also a specific requirement there should be sufficient provision for access to freight facilities.

  8754. Yes, and that will be dealt with because directions will be issued as to the final form of the access contract, and those directions will be issued under Schedule 4 to the Railways Act, will not they?

   (Mr Bennett): Yes.

  8755. That is the standard mechanism. Having had the debate and the decision, the ORR issues a set of directions as to the final form of the access agreement.

   (Mr Bennett): That is correct.

  8756. So effectively directs Network Rail: This is the form of the agreement you are to reach with Crossrail. If we look at paragraph 80: "We are currently developing modifications to [the access option] that will give effect to this ... we would not use our power to direct changes to the modelling assumptions in order to increase the capacity available for other passenger and freight services at the expense of approved Crossrail services"—in other words, once they are approved they are entitled to as much protection as any other service which has been approved. "However, we would be able to direct a reduction in those rights if circumstances changed", and then goes on to say: "Crossrail will need to demonstrate compliance with the objective test before the rights granted in [the access option] can be used, and will be subject to an on-going obligation to achieve 92 per cent PPM after an initial services commencement phase. Crossrail rights could be lost from the TAO if this standard is not met". In other words, the threat is clear: Crossrail has to meet the objective test which factors in protection of rail freight growth, and if it does not there is a clear threat it will lose its access right?

   (Mr Bennett): That is correct.

  8757. And, although the ORR might reconsider matters, the ORR has to follow the procedure under the Railways Act if he is going to re-issue directions, does he not?

   (Mr Bennett): Yes.

  8758. The procedure under the Railways Act requires the ORR to consult the industry and to take account of consultations?

   (Mr Bennett): That is correct.

  8759. There is, therefore, a fair and transparent procedure if the issues require reconsideration and rebalancing in the future, but with full industry involvement in the light of whatever information is available at the time?

   (Mr Bennett): That is correct if we are describing normal industry processes. Our concerns are that since the first timetabling work has only shown what is also described in ORR's evidence as very poor performance in terms of PPMs on some routes, and that is, on the basis of an infrastructure specification, to include some of the works that we require, we are concerned that their exclusion might be extremely problematic.

8   Crossrail Ref: P63, The capacity and performance implications of the TAO (LINEWD-34_05-086) Back

9   Crossrail Ref: P63, The capacity and performance implications of the TAO (LINEWD-34_05-087) Back

10   Crossrail Ref: P63, RFG response to the ORR draft decision on the Crossrail Access Option application, 17 March 2008 (LINEWD-34_04B-005 to -006) Back

11   Crossrail Ref: P63, The Office of Rail Regulation's decision on the application for a Track Access Option for Crossrail passenger services on Network Rail's network, 14 April 2008 (LINEWD-34_05-109 to -112) Back

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