Examination of Witnesses (Questions 9920
- 9939)
9920. BARONESS FOOKES: I believe you
were saying that the Rail Regulator's resources were rather thinly
stretched.
(Mr Smith) I was saying that. We were debating as to why
the ORR in the meeting that we had with them on 13 March said
that it was not able to produce a decision relating to specific
infrastructure and they did not explain that point. I was going
to go on to say that at that time the ORR's resources were very
thinly stretched dealing with the consequences of the overrun
on the West Coast Main Line at Christmas, the orders and provisional
orders that had been served upon Network Rail and the analysis
being taken by their operations and engineering team into what
had gone wrong at Christmas and what Network Rail was proposing
to do to put it right. If the ORR had wanted to make a recommendation
relating to specific infrastructure they would have had to have
modelled the effect of that infrastructure and whether it produced
the additional capacity or the additional performance. They would
need to assure themselves that the figures were correct, so they
would need to use their own operating and engineering resources
to make that happen. The point I was making, but it was speculation,
was that their operating and engineering resources were diverted
at that time on a number of other quite important issues within
the railway industry and, therefore, may not have been able to
have coped with this particular issue at that particular time.
9921. MR ELVIN: Of course, that is speculation,
Mr Smith.
(Mr Smith) That is speculation.
9922. The ORR had evidence from Network Rail,
did it not, on the modelling as well as from the industry?
(Mr Smith) There is evidence provided but the ORR will always
want to assure itself that what it has been told by Network Rail
or the industry is correct, so it will apply its own resources
to test that.
9923. Let us be absolutely certain about this
so that Lady Fookes does not get the wrong idea. This is not a
one-sided exercise, is it? It is not simply the applicant for
the access option or even Network Rail putting forward its case
and its evidence alone, there is evidence also from all of the
other parties involved should they wish to put it in?
(Mr Smith) Evidence from all the parties, but if one is doing
timetabling testing, which is essentially what would have been
needed to test that a piece of infrastructure did what it said
it was going to do, you need timetabling experts and the majority
of those reside either within Network Rail or a few within the
Office of Rail Regulation.
9924. Their Lordships and my Lady have already
seen the debate in the hearing transcript, or at least will see
it in the transcript if they were not here, with RFG. Mr Burns
gave evidence, and indeed Mr Morris for Crossrail, that the modelling
was only at the first iteration and there was considerable scope
for improvement and considerable additional modelling to be done
later. I think August is the next iteration. That is part of the
uncertainty which led the ORR to the conclusion that it should
be output driven and the ring-fencing of the capacity should be
protected by the revised change control mechanism. That was all
part and parcel of the reasoning for the decision.
(Mr Smith) That was included in the transcript, yes.
9925. Those are clearly the reasons why the
ORR went for the output and change control mechanism, because
the modelling was at a very early stage and there were acknowledged
uncertainties with it.
(Mr Smith) That is the reason the ORR has written into its
decision.
9926. We have no reason to believe it is anything
else, have we?
(Mr Smith) I have no other evidence.
9927. Everyone has said that the process has
been fair and transparent, the ORR has not suggested any reason
other than those which have been given in the documents their
Lordships have seen.
(Mr Smith) I am not aware of any other reasons.
9928. MR ELVIN: Thank you very much.
9929. CHAIRMAN: Lord Young, do you want
to ask Mr Elvin questions or Mr Smith?
Examined by THE
COMMITTEE
9930. LORD YOUNG OF NORWOOD GREEN: I
think Mr Smith. I do not want to put you too much at ease. That
was a joke! I understand your concerns but they have arrived at
a decision that they feel it should be based on outputs and they
arrived at that figure of 92 per cent PPM. Presumably that was
based on some modelling, they are not just clever figure-pluckers,
they got there by a process that is reasonably transparent and
capable of being validated and is there for a reason.
(Mr Smith) The 92
per cent was a figure that was suggested by Crossrail, and Crossrail
will have to explain why they chose 92 per cent. They said they
can actually get to 95 per cent. Our presumption is that it is
drawn from the Government's wish to have a PPM of just over 92
per cent by 2014 for the whole railway. The ORR in choosing 92
per cent were building on some existing assumptions about the
performance of passenger trains. They also recognised that the
71 per cent that the first run of the model had produced was completely
unacceptable. The ORR's problem was they were putting in place
some mechanisms and some tests that will only be put into practice
perhaps in ten years' time and that was all they felt they could
look at at that time. The point I made is that leaves us with
ten years' uncertainty that when everybody is put to the test
that mechanism actually works because no-one has ever tried this
way of sorting out capacity before.
9931. Thank you for that. Can I ask you one
further point. Is that a challenging figure, 92 per cent? You
clearly are of the view that the first suggestion of 71 per cent
was not acceptable, but is 92 per cent a challenging figure?
(Mr Smith) 92 per cent has not been achieved in the UK rail
industry since before the crash at Hatfield, which saw the industry
go into performance meltdown, particularly on the passenger side.
On the passenger side, we are currently approaching 90 per cent.
90 per cent is a bit more of a stretch. 92 per cent of short-distance
trains arrive within five minutes. Long-distance trains arrive
within ten minutes. I think it will be challenging because this
is going to be a very intensively worked piece of railway. I have
been on the railway for nearly 30 years and the intensity of service
that is being proposed on both the Great Western and the Great
Eastern and, particularly on the Great Western, the number of
divergences to Heathrow, intermingling it with freight services
and other passenger services, is great. It is easy to achieve
92 per cent or even 100 per cent on a branch line with one train
going up and down, say between Norwich and Cromer. On this bit
of railway with Network Rail needing engineering access, with
our freight trains trying to get into terminals, trying to get
out, avoiding the peak hours but running at nights, this will
be demanding.
9932. Surely it is in Crossrail's interest to
ensure that they have got the necessary infrastructure to meet
that challenge, bearing in mind the very valid point you make
about the complexity of interaction between different services.
(Mr Smith) That was the very point I was making yesterday,
that the six pieces of infrastructure we were seeking, including
Acton, were not just for the benefit of freight. Because freight
and Crossrail are both using the relief lines as well as some
of the complementary passenger services, these pieces of infrastructure
will benefit all users of the railway, all the operators, all
the customers, whether they are passengers or freight. This is
not just a special pleading by the rail freight industry, this
is what will make the Great Western work with the intensity of
service that everybody is proposing. That is why it seems sensible
to agree to do these pieces of work now. The Airport Junction
seems to be virtually a done deal, but not a commitment. The other
ones are not complex pieces of infrastructure but very sensible
additional pieces of work. Bear in mind these ideas were not ours,
they were Crossrail's which create the flexibility that all users
of the network need. They are an extremely good idea. To have
certainty about them now would mean the objective test is important
and the objective test will be put to the test in ten years' time,
but to know that one passing loop, one bit of railway, enables
a freight train to wait before going into Southall Yard rather
than crossing all four lines on the flat, is sensible operating
and I think any professional railwayman could give you that assurance.
These are plain, simple good ideas.
9933. LORD SNAPE: Given the projections
that have been made for the freight industry over the next decade
or so, Mr Smith, do you think it is feasible that you could operate
not just the existing freight trains but the forecast ones without
the infrastructure improvements prior to Crossrail actually starting?
(Mr Smith) It will be tight but our view is that if you did
not have Crossrail we could operate. We would probably have to
run more services at night and maybe in the early hours of the
morning and late in the evening, so we would have to spread our
services out 24 hours. That said, customers are becoming much
more 24 hour orientated as well. Network Rail have plans for the
seven day railway, which you may have read about, which they believe
they can do with less engineering access. There are ways and means
of fitting in the growth that we anticipate. The problem comes
with the step change in the level of passenger activity with Crossrail.
9934. Take us through that then. If some or
all of these infrastructure improvements are not made, what will
happen in the first, let us say, two years of operation of Crossrail?
(Mr Smith) There has been no timetabling modelling without
the infrastructure, so I will caveat my statements with that.
What I think we will see is if there is no infrastructure improvement
and all the Crossrail services are permitted to run, I would expect
the number of paths per hour for freight would have to be reduced.
The worst time will be during the peaks but then we try to avoid
running our trains during the peak hours anyway, we try to be
a good neighbour to the passenger railway. The pressure would
come in places like the shoulder peak. For example, we try to
bring our stone trains up from the Mendips and get them into the
terminals before the current peak period starts. Under the Crossrail
proposals the peak and the shoulder peak will start earlier—Crossrail
believes there is a significant passenger demand for that—therefore
we are either going to have to bring our stone trains up even
earlier, but then one is saying to a customer, "Do you mind
loading this train at three o'clock in the morning,", and
they will say, "Our neighbours are not too keen on that",
and I can understand that point, or we are going to have to have
spare sets of wagons so we keep the trains held back and throw
them in when we can or, more realistically, there will be a cap
on the amount we can do.
9935. Let us look on the black side of this
particular equation, that all the infrastructure improvements
that you are talking about in your petition are not made, the
Crossrail trains are introduced and according to Mr Elvin, of
course, these matters will be resolved in due course and it will
be Crossrail that will lose out. You have spent a lot of time
in the rail freight industry, is it your view that for too long
perhaps rail freight has been treated as the poor relation of
the railway industry and the pressure will be on you to reduce
your trains rather than go through this procedure of going through
the ORR and the impact being placed on Crossrail rather than on
rail freight?
(Mr Smith) Let me give you just one example that makes me
have the fears that you have just expressed. In December 2008
there will be a very intensive passenger service introduced on
the West Coast Main Line as the end result of the very long upgrade
works that have been going on. EWS has been served by Network
Rail with something called a "carve-out notice" by which
Network Rail has the right to change the times of, or remove altogether,
freight paths on the West Coast Main Line that are in conflict
with the new passenger service. That is a matter between ourselves
and Network Rail. We are challenging it. We are realists, we appreciate
the politics of railways is primarily about the passenger and
the passenger train and when there is a squeeze on capacity it
is freight that does suffer.
9936. LORD BROOKE OF ALVERTHORPE: Mr
Smith, if Crossrail did not hit the 92 per cent do you believe
that the regulator would in fact deny them access, they would
leave the tunnel unused and all the trains unused?
(Mr Smith) That would be quite a surprising outcome.
9937. What do you think would happen?
(Mr Smith) It is speculation but I can presume that all parties
would be brought together by whoever is running the railway at
that time, Department for Transport perhaps, and we would all
be asked to see if we could make adjustments, make compromises,
reduce our ambitions. We actually had that experience, again on
the West Coast Main Line when that project was going wrong, when
the Strategic Rail Authority started up and Mr Bowker was taking
over as chairman. The project was going nowhere and he called
the freight operators in, the passenger operators, and said, "Okay,
guys, what compromises can we all make to make this project work?"
We gave up some paths and we persuaded customers to go by different
routes and in some cases some traffic did not materialise and
the long-distance operators and the commuter operators made some
compromises as well. That is what business is all about.
9938. So there is a history of this?
(Mr Smith) There is.
9939. CHAIRMAN: Is what you have said
about the West Coast Main Line an example of the use of the CCM,
so ultimately if there is no agreement it would go to the regulator?
(Mr Smith) All disputes will eventually end up with the regulator
who could use the CCM or other mechanisms in accordance with his
published procedures by which he will then allocate capacity.
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