Select Committee on the Crossrail Bill Minutes of Evidence


Examination of Witnesses (Questions 10360 - 10379)

  10360. That the Petitioners seek to be opportunistic, we say, is shown not only by their about-face in comparison to their positive reception of the provisional ORR decision, but by the fact that your Lordships have been troubled with a very lengthy exposition of growth in the freight industry which is not in dispute and was included in the modelling; by EWS's criticism of the evidence before the ORR, which to date they have welcomed the ORR's decision; spurious justifications advanced by witnesses as to why they should bring a parallel claim before your Lordships having not pressed their claim before the regulator; and Mr George's false analogy with planning applications.

  10361. We say the concern which has been expressed is difficult to follow in circumstances where the ORR has plainly acted independently in balancing all the interests and has not accepted the entirety of the Promoter's application. Stringent requirements have been imposed on the project in terms of the objective outputs test and the change control requirements. The ORR's decision is welcomed and judged to be fair and transparent and the ORR's legal duties are set out in the 1993 Act and attempts to pressure the ORR and take a decision based on that pressure would be amenable to judicial review.

  10362. The issue between us is a narrow one. We are simply saying to your Lordships, we want to retain a modicum of flexibility for a relatively short period of time, possibly only as much as three to four years, because there is the possibility that we may not have to spend several millions of public money on infrastructure works that may turn out to be unnecessary. We have got mechanisms, as your Lordships have seen now at some length, in the ORR's decision to secure that Crossrail complies with the requirements to protect the interests of other passenger services and of the freight industry and growth in the freight industry. There is that protection there. As Mr Berryman has said to you very frankly, there is a good chance we will have to do the works in any event to get to the position under the access option. There are possibilities that we should not, but it is a question of prudent public accounting not to require us to do works when they may be costing £10, £20, £40 million which simply then becomes irrelevant.

  10363. It is very easy in the context of a £16 billion project to regard tens of millions as small change, if only it was small change to most of us! It is a matter of prudent public accounting and we simply seek that flexibility. The reality is freight is anxious to secure capacity which is needed in any event from the network, whether or not Crossrail goes ahead. As I say in sub-paragraph 4, a number of the works which you have been asked to look at are works which are committed and funded in any event. Somehow it is expected that Crossrail can wave a magic wand and accelerate other infrastructure works unrelated to the Crossrail Bill in order to generate capacity which is required whether or not Crossrail goes ahead. That is just an indication that there is perhaps a little inflexibility and a degree of opportunism in the approach of the freight Petitioners.

  10364. Finally, the reliance for commitment to the on the Acton dive-under, of course there are specific reasons for the dive-under being committed at this stage and Mr Berryman has repeated his explanation to you this afternoon. If the dive-under is not put in, then effectively we extinguish the Acton Freight Yard, which is a very important facility because there are no real alternatives and there is no other way of preventing a significant number of conflicts and, as your Lordships heard, over 30 movements per day.

  10365. It is necessary to examine whether the Petitioners should succeed on the very narrow issue of whether we should have the degree of flexibility that we say is properly to be allowed on prudent public accounting grounds.

  10366. Firstly, the points that I have already made, that it marks a significant and unjustified departure from the fully argued position before the regulator.

  10367. Secondly, and I say this with the greatest of respect to your Lordship's Committee, your Lordships are not in as advantageous a position as the regulator, which heard a much wider sector of the industry, had fuller representations and evidence and was in a better position to balance the interests of the industry and come to the conclusion which Parliament has said is the regulators to reach as to what the terms should be.

  10368. Can I just interpose this, this comes from a point which was made this afternoon, even if we had to commit to all of these works today, regardless of whether or not that would be expenditure that was necessary at the time, that still, on current assumptions, will not deliver the full capacity required by the regulator. The freight operators are asking for six or seven items of works, one of which is committed in any event, one of which is highly improbable that it will not be committed within the near future, which is the Heathrow access, but even those will not guarantee what can only be guaranteed through the access option, which is the 92 per cent. To do that you will require the majority of the works on current assumptions, including the £80 million works at Maidenhead, which are not within the list. Your Lordships may well ask, "What is the point of requiring us to commit to works which we are probably going to commit to in any event as a matter of practical necessity which are ring-fenced and protected by the access option as to the outputs and which even if we do them will not guarantee the necessary capacity to protect the paths which have been ring-fenced by the regulator in the terms of the access option?".

  10369. There is only one mechanism which is left to do that which is the regulator. It does make the position of the freight industry incomprehensible before your Lordships because it does not secure the objective of the regulator. It does not go far enough in one respect and it goes too far in others because it is requiring us to commit to matters which there is at least a possibility we may not have to commit to and if £40 million of public money can be saved, then surely that must be a desirable thing.

  10370. My Lords, I have set out some further comments here and I do not want to take them at any great length, they are in writing should your Lordships wish to read them at greater length. Can I just make the point that Mr Garrett accepted yesterday that of course to tie us to the infrastructure works now might also have the effect of unduly fettering future decisions by the ORR and you will set that against the fact that we cannot change the assumptions as to infrastructure in the model without the industry agreeing or without the regulator taking an independent decision that we were right. As Mr Garrett explained to you this morning in re-examination, he said, surprisingly perhaps in view of his earlier position, that in the absence of the detailed design of the infrastructure works, he could not say what the implications of those works were for capacity, so the only expert evidence called by the Rail Freight Group before your Lordships says, "I can't tell whether the works as they are at present will secure those capacity improvements", which rather goes to prove our point, that there is a degree of uncertainty, which means we should not be tied down with the degree of nicety which the Petitioners suggest.

  10371. My Lord, summarising the position, we are looking for a small degree of flexibility in the interests of prudent public accounting. We are looking for a small degree of flexibility which does not prejudice anybody because the way in which the control change mechanism and the outputs based objective test operates will ensure that freight paths are protected, including future freight paths required for growth to 2015.

  10372. It is noticeable that the passenger operating companies and others who may be concerned with infrastructure works have not petitioned and, in our submission, the degree of flexibility we are seeking here is reasonable and we should not be required to give any undertaking beyond the position that the ORR has already established to the access option.

  10373. I can be brief with regard to blocking rights because nothing arises on blocking rights. It is agreed that the Network Code and other mechanisms of the industry can be used, and it is agreed that the appropriate approach is to include an Olympics type clause to introduce a new consideration for the ORR to take into account when reaching its decisions.

  10374. I turn then to the question of compensation. This turns out, having heard the witness this morning, to be a very narrow issue. We have given an undertaking which cures any concern there may be if G9 of the Network Code is used. That is, we have given an undertaking in the form in which Mr Lancaster's letter sought to reassure EWS, and with regard to the question of network change the concern is there may be some impact on EWS which falls into (b) of the definition of network change. It is a common position before your Lordships, and the witness for EWS made this clear, that the majority of the works which are likely to impact on EWS fall within little ground (a) and the six-month period restriction does not apply to little (a), therefore we are talking about the possibility of works which last for less than six months and which are likely to be the minority of works which impact, or potentially impact, upon the operator.

  10375. CHAIRMAN: And they are re-examining the Code anyway, are they not?

  10376. MR ELVIN: Your Lordship has my next point: in any event industry mechanisms are being re-examined by the industry. We have given a commitment that, where there are no industry mechanisms, we will pay compensation based on the no net gain no net loss principle, but at the moment there is an industry mechanism, even if it allows compensation with certain restrictions, but industry is re-examining that. Our short point on this is that this is another instance where, given the wide assurance that exists through the little ground (a) of network change definition and the undertakings that we have provided both in the other Place and to your Lordships this morning, industry mechanisms can, as we all agree, be regarded as the proper way to take matters forward.

  10377. I simply record at paragraph 25, then, that with regard to the intended way forward with the rail clauses, as I said on Tuesday, it is not considered appropriate to give any undertaking with regard to introducing the amendments. The Minister has made two policy statements and, with respect to the Petitioners, that is sufficient to provide the necessary degree of reassurance as to what will happen.

  10378. On Tuesday 29 April the Committee asked for a note from the Promoter explaining clauses 40 and 41 of the Bill.

  10379. Clause 40 is based on a provision contained in the Channel Tunnel Rail Link Act 1996 and deals with co-operation between the controllers of railway assets with which Crossrail construction, maintenance or operation interact and the Nominated Undertaker. Either party can require the other party to enter into an agreement. The object is to ensure that neither the Nominated Undertaker nor the controller can act unreasonably in dealing with a problem relating to the interaction of the Crossrail works with overland or underground railway assets.



 
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