Examination of Witnesses (Questions 546
WEDNESDAY 22 NOVEMBER 2000
546. Good afternoon, gentlemen. We are very
glad to see you. I am sorry to have kept you waiting a few moments.
Can I ask you firstly to identify yourselves, for the record?
(Sir Philip Beck) I am Sir Philip Beck, Chairman of
Railtrack. This is Steve Marshall, our Chief Executive; and Richard
Middleton, our Technical Director.
547. Mr Middleton is well-known to us. Did you
have any remarks you wish to make as an opening gambit?
(Sir Philip Beck) I will be brief; just
very briefly on the management changes which Railtrack announced
yesterday. These senior appointments are intended to strengthen
and will strengthen the role of engineering at the Board level
and emphasise the company's customer focus. Richard Middleton
you know already; he is a Chartered Engineer with 24 years' experience
in the railway industry, and has become Technical Director. The
company's engineering strength at the top has been further increased
with the appointment of Andrew McNaughton, who is a Chartered
Engineer with 27 years' experience; he will be Chief Engineer.
Jonson Cox, who is not with us today, is Railtrack's Chief Operating
Officer and is currently responsible for front-line operations
and will assume Board responsibility for commercial and franchising
548. And you are going to tell us Mr Cox's years
in the railway industry; how long has Mr Cox been in the railway
(Sir Philip Beck) He has been in the railway industry
for only the last two months; before that he was with a major
water utility. These appointments are intended to signal clearly
the priority of the Board and the Chief Executive to give engineering
in our business a greater focus and strength as well as our relations
with our customers. We know that it has been a very difficult
time for our customers and we very much regret that they are still
suffering delays to their services, and I want to assure them
that we are putting every effort into delivering the national
recovery programme and getting the service back to normal as quickly
as possible. We are focusing on dealing with this crisis; we need
to ensure that we have a framework in place to provide the long-term
improvements and the investments in the network. The building
blocks of this clearly are the Government's ten-year plan and
the Regulator's review, and that is what originally we were coming
here to discuss today, along with other matters that the Committee
may wish to raise. Our Chief Executive is probably best equipped
to lead our part in these discussions, Madam.
549. Welcome, Mr Marshall.
(Mr Marshall) Thank you very much. Good afternoon.
Chairman: It is nice to meet you.
550. Can you tell me, in your own view, what
the first priority should be, as far as you are concerned, over
the next few weeks?
(Mr Marshall) The number one priority over the next
few weeks is clearly to get the recovery programme, which is well
under way already with a lot of work to do, executed and done;
and that is going to take us through in reality substantially
to Christmas, we will have the network a fair way back to normal,
and by the time we get into January, the middle of January perhaps,
the third week, we will have it substantially back to normal.
That is our number one priority, by a long way.
551. So you expect them to be able to deliver
all the Christmas mail, do you?
(Mr Marshall) We know there are difficulties and the
network will not be back to normal by Christmas, and that is a
fact and there is no point in not recognising that, but our priority
is to do everything we can.
552. So we are going to have chaos at Christmas,
are we, as far as the postal service is concerned?
(Mr Marshall) We would certainly hope it is not chaos
at Christmas, but again we have to be frank and say that the network
will not be back to normal by Christmas, there will actually be
a lot of work over the Christmas period, because that is an acceptable
time to get some of the possessions, and therefore it does take
us into January before we are going to be substantially there.
The programme then does go on after that, because we have some
points and switches and crossings to do that will take us later
on into the year; but by the time we get into January our firm
intent is to have the network substantially back to normal.
553. Can you just tell meI think this
one is for you, Sir Philipif you think it has gone far
enough, that, your resignation and the resignation of your Chief
Executive, do you not think in the eyes of the public, the perception
that they hold is that the whole Board should have gone?
(Sir Philip Beck) No, I do not. We have an experienced
Board, with engineers, railwaymen, businessmen and people with
public utility experience, and I think that is the sort of balanced
Board that Railtrack needs.
554. But do the public believe that?
(Sir Philip Beck) I am afraid I cannot answer that.
I would not presume to speak for the public, but I think that
what they would expect, what I would expect them to expect, is
that there is, what I have just said, an experienced team of engineers
555. Perhaps we could ask you, therefore, considering
the changes that you have outlined this afternoon, has the number
of engineering years increased at Board level or decreased at
(Sir Philip Beck) The number of engineering years
at Board level is the same as before.
556. Oh; you do not think that possibly that
might be a difficulty with the general public, you might feel
that you should have a rather more engineering-based structure?
(Sir Philip Beck) Yes, I do, and that will come through.
The Board meets monthly, as most public companies do, as you would
know; however, the company is run on a day-to-day basis by the
Group Executive Committee on which there are significant numbers
of other engineers, and, perhaps, Steve, you could comment.
(Mr Marshall) Yes; if I could pick up on that. The
Group Committee runs the company on a day-to-day basis. As part
of these arrangements, we have put Andrew McNaughton, who reports
to Richard, as a voice on engineering, as our Chief Engineer,
he joins the Group Committee straightaway, and what we are going
to do is move very quickly to build the quality of that engineering
resource where that has depreciated.
557. You have given us an organigram, which
is very clearly set out, and it does not quite give me the confidence
that perhaps I should have, given what you have just said?
(Mr Marshall) The organigram, I suspect, Madam Chair,
is simply my direct reports in the organisation, so the engineering
side that I think you are querying on the organigram has Richard
Middleton, reporting to Richard is the Chief Engineer, who also,
in fact, is joining the day-to-day decision-making committee that
runs the company.
558. I am going to bring in Mr Donohoe again
in a minute, but, I am sorry, I just want to clear this up: Mr
(Mr Middleton) Perhaps I can just add, although, yes,
I am a Chartered Engineer, in my previous role I did not have
responsibility for engineering.
559. No, we gathered that, Mr Middleton; if
you remember, we were interested.
(Mr Middleton) In this role I have total responsibility
for engineering, and that means none of my other responsibilities
that I had as Commercial Director apply to me, so I can give my
entire attention to focusing on engineering within the company,
putting in place the right leadership and getting the right conpetences
throughout the whole organisation.