Examination of Witnesses (Questions 9860
- 9879)
9860. MR ELVIN: My Lord, because at the
time that the Bill was drafted, and at the stage of the detailed
design that we had reached, it seemed that those infrastructure
works were those that were likely to be required. We think it
is highly likely that a significant number of those works will
probably be required in one form or another, but we are talking
about a period, if you remember the Bill scheme was lodged with
Parliament in February 2005, of construction not beginning possibly
until next year, 2009, the construction of which will continue
over a period until 2017. We are looking at a lengthy period of
time. All we are seeking is by refusing to give an undertaking
that we are not pinned down to absolute precision as to which
of the infrastructure works may be needed because it may be that
an improvement in one particular item of infrastructure works
renders unnecessary the capacity that would be generated by another.
We simply wish to preserve a degree of flexibility. We are already
tied down in terms of flexibility by the 92 per cent output requirement
which assumes the infrastructure works, so we have got to come
up with something as good as the infrastructure works in terms
of generating capacity. It may well be we end up having to do
them. We are simply looking for flexibility in case we can produce
something which works just as well but is not quite identical
to carrying out all of the works. It is no more and no less than
that.
9861. LORD BROOKE OF ALVERTHORPE: Those
are all broadly costed?
9862. MR ELVIN: Yes.
9863. LORD BROOKE OF ALVERTHORPE: So
why do you not give an indication then that that money is ring-fenced
and would be available for infrastructure purposes, if not necessarily
those?
9864. MR ELVIN: I think the short answer
is none of the specific items of the project is ring-fenced as
such, it is a global figure for the funding of the project rather
than ring-fencing the specific infrastructure.
9865. LORD BROOKE OF ALVERTHORPE: I was
asking whether you could ring-fence the 24 in financial terms?
9866. MR ELVIN: If your Lordship would
forgive me, I do not want to answer that question on the hoof,
I would like to take instructions on that to get the proper answer
because I do not know it off the top of my head.
9867. LORD BROOKE OF ALVERTHORPE: We
are seeking to find an answer that meets the interests of all
the parties. This has to go back into the Chamber.
9868. MR ELVIN: My Lord, can I at least
say this, you have a funded project which includes funding which
at the moment will pay for the works set out in the Bill. If prudent
cost savings could be made during the course of construction,
because we are not tied down to carrying out unnecessary infrastructure
works, then surely proper public accounting would require those
savings to be made. All we are seeking is the flexibility to say
that if it turns out that we do not need to do all of the works,
we do not have to do all of the works, although we have power
to do them. Of course, the flip side of that is if we cannot achieve
the 92 per cent even with those infrastructure works, we may have
to look for something better. We are not saying we should be tied
down to any specific design—there is no specific design
we can be tied down to because the infrastructure works are not
fully designed out in any event—but we have to achieve an
output driven model which could be more stringent than we think.
We hope it will not be but if it is more stringent, then if we
want to have access for our costly rail project we will have to
provide additional infrastructure.
9869. LORD BROOKE OF ALVERTHORPE: I will
leave it at that. You see the point I am making.
9870. MR ELVIN: I can see your Lordship's
point.
9871. LORD BROOKE OF ALVERTHORPE: I look
forward to your further response with interest.
9872. MR ELVIN: I will do my best to
get a rapid answer to your Lordship's question.
9873. LORD YOUNG OF NORWOOD GREEN: I
must admit, I can see why you would want some flexibility because
there are, if one looks at the range of options, a number of variations
that might occur as a result of further modelling and further
examination. If you decide that one or other is not necessary,
I suppose the concern that is expressed by EWS is that in some
way or other it will have a detrimental impact on either existing
freight paths or future freight paths. Having looked on the screen
at what is in front of us now, I must express the view that I
am more reassured about the ORR's decision to base it on outputs
rather than trying to predetermine it, but can you foresee any
situations where you decide for perfectly valid reasons, valid
in terms of both safety and operational requirements, that you
do not need a portion of the infrastructure that you at the moment
have said you might?
9874. MR ELVIN: We can only foresee that
to the extent that we can still deliver the protection of the
capacity which is being protected by the outputs and that it does
not generate conflicts with the protected paths. Can I flick back
to paragraph 79, which is page 111 of this exhibit.[7]
Your Lordships will recall the input assumptions include the protection
of existing franchise passenger paths, point A, freight services,
which will be in operation, including the allowance for growth.
We then look at paragraph 80 and if you see the last four or five
lines there, "Crossrail will need to demonstrate compliance
with the objective test before the rights granted in access option
can be used".[8]
Of course, the corollary of this is if we are conflicting with
these protected paths, including the paths for freight growth,
the change control mechanism deletes out paths if there is a conflict.
9875. LORD YOUNG OF NORWOOD GREEN: Demonstrate
to the ORR?
9876. MR ELVIN: Demonstrate to the infrastructure
manager and the ORR because the infrastructure manager—Network
Rail for the main part of the network, subject to the discussion
we had yesterday about the central section—but as infrastructure
manager, Network Rail has a contract with Crossrail and can enforce
that contract and the ORR is the final adjudicator. The difficulty
is that if we do not achieve it the industry says, "You're
conflicting with one of our protected paths, including the growth
paths to 2015". You cannot resolve it, but there is clearly
a period to see if it can be resolved, but if it can't be resolved
the bottom line is we lose our path. It is not the industry that
loses its path, we lose our path, so there is a very strong mechanism
for protecting the interests of industry.
9877. CHAIRMAN: Mr Elvin, do I understand
the way in which the ORR approached this is this. We have got
a model which includes the infrastructure ones and the demands
that everybody puts forward, including the freight operators.
We are not, however, going to grant the access option on the basis
of the inputs, we are going to grant it on the basis of an output
of 92 per cent because there is so much uncertainty and there
is so much time still to pass that we cannot use an input-based
approach and we will have to leave events to show whether you
can meet your output requirements of 92 per cent?
9878. MR ELVIN: Your Lordship is absolutely
correct. As a corollary of that, the provisions then put enormous
protection around achieving the 92 per cent in the form of saying,
"You can't draw down your access option unless you achieve
it and if there are conflicts of the change control mechanism,
you lose your paths", so there are these safeguards built
in to ensure the output driven model delivers a railway which
does not conflict with those protections which have been afforded
to existing industry.
9879. CHAIRMAN: In order to retain your
access option it may then well be that you will be forced to accede
to implement the infrastructure works, otherwise you will not
be able to do it.
7 Crossrail Ref: P67, Correspondence from EWS Ltd
to the Office of Rail Regulation, Para 79, 17 March 2008 (LINEWD-34_05-111) Back
8
Crossrail Ref: P67, Correspondence from EWS Ltd to the Office
of Rail Regulation, Para 80, 17 March 2008 (LINEWD-34_05-112) Back
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