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
| 
