Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of Witnesses (Questions 175 - 179)

WEDNESDAY 12 JULY 2000

SIR ALASTAIR MORTON, MR M GRANT AND MR T JENNER

Chairman

  175. May I begin, Sir Alastair, by apologising for keeping you waiting? When a Division is called in the House, as you know, I have no alternative but to suspend the Committee. May I ask you to identify yourself and your colleagues for the record?

  (Sir Alastair Morton) On my right is Mike Grant, Franchising Director and Chief Executive of the Shadow Strategic Rail Authority. On my left is Terence Jenner, Solicitor to the British Railways Board and to the Shadow Strategic Rail Authority who has a rather wider role than the title might suggest.

  176. May I ask whether you want to make some opening remarks?
  (Sir Alastair Morton) Very few. We feel at the moment we are getting to the end of the overture of this particular opera. You could say it began with the Integrated Transport White Paper and the Select Committee's report. The Bill will be law by the end of this year we trust and we have been busy in shadow form during the overture for more than a year. Now we are getting within ten days of the Government's ten-year plan which will tell us how much money we have. Very shortly after that the Regulator will produce a final draft and then a final version of how much money Railtrack has and both those are very important elements. We are in the thick of the franchising now, we have produced a map which shows the shape of things to come, rolling stock orders have resumed and we would suggest about the end of November, but there is nothing definite or magic about the date, we shall produce our strategic plan to follow on from the Government's plan. Ours will set out to prioritise investment in the system. We shall be through all that and ready to go when the Bill passes into law we trust.

  177. We shall want to explore various aspects of that with you. May I begin by asking you whether the Regulator is placing too much emphasis on enforcement action in the way he manages his relationship with Railtrack?
  (Sir Alastair Morton) No, I do not think we would suggest that. The Regulator has taken a view, which has quite widespread support and as you may have noticed from various press releases quite often explicit support from us, to sharpen up, brace up the performance of those responsible for the network. These things have side effects rather like crime in my native country of South Africa: it is so different from what went before that people think it is more shocking than it perhaps is. Nevertheless, it has had a considerable effect on just about all the players. As it shakes down and most particularly as the Regulator's five-year review comes out and is digested and we see where we go from here, as opposed to shadow-boxing around it, which has definitely been happening, a rhythm will develop which will be a faster rhythm than before what I call Tom Winsor's cattle prod.

  178. Do you think his approach risks weakening the company's ability to invest in the rail network?
  (Sir Alastair Morton) I remember when the shares of EuroTunnel were somewhere around £12.

  179. So do we all.
  (Sir Alastair Morton) Unless you were actually raising money when Railtrack shares were at £17 it is of academic interest only. There is no law of stock market or nature which says their shares have to be at that level. The shares will be where the market judges the circumstances to warrant them being. Therefore Railtrack will raise money at the price that the market is willing to give it. That is privatisation, that is capitalism.



 
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