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

Examination of Witnesses (Questions 686 - 699)




  686. Good afternoon to you, Sir Alastair. Thank you very much for joining us this afternoon. Would you be kind enough to identify yourself and your colleague.

  (Sir Alastair Morton) Alastair Morton. I am Chairman of the Shadow Strategic Rail Authority. My colleague, Mike Grant, is Chief Executive of the Shadow Strategic Rail Authority.

  687. Do you have any opening remarks which you wish to make?
  (Sir Alastair Morton) No, thank you. We put a note in and we will be happy to answer your questions.

  688. What qualities are the Government or the Shadow Strategic Rail Authority looking for in a new chairman for Railtrack?
  (Sir Alastair Morton) The most important thing to say is that Railtrack being in the private sector, its chairman will be chosen by its Board and ratified by its shareholders in due course. Our concern—and we see the chairman as a very important appointment to deliver this concern—is that Railtrack be fit for purpose, not so much to get over the current crisis because the new chairman will not be there for that, but to deliver the ten-year plan which is going to be a heavy task, when you add a lot of major renewal and enhancement to the already heavy burden of operations and maintenance. He has to lead the way in ensuring that Railtrack has the people resources and, so far as possible, the financial resources to take on a very big task.

  689. Are you going to have any influence? Have you discussed with the rest of the Board? We all understand it is in the private sector but have you been asked for an opinion about the sort of person you think would be suitable for the job?
  (Sir Alastair Morton) As you would expect, the Board has thought it a good idea to see whether I would express views, such as I have just expressed, and to go beyond that into some of the tasks that we ourselves are sharing; for example, heavy capital investment project preparation. We will be sharing that with them. They thought it a good idea to ask my opinion. I have had meetings with the non-executive directors and, in particular, with the Chairman of their Nominations Committee, which is the normal corporate body within a board that pursues matters like this.

  690. Without giving away any secrets, have you nominated anybody or given them a short list of people whom you think would be suitable?
  (Sir Alastair Morton) No, I have not, but they will certainly wish to keep talking to me about possible candidates as they emerge. That does not give me a veto or a control. It is simply an opinion.

  691. Did they ask you for your opinion about the split between engineering and administration or the other functions of Railtrack?
  (Sir Alastair Morton) No, not specifically. Our conversation ranged pretty widely. I would be happy to say that at the end of my conversation with the non-executive directors they do have a clear understanding of how big I see the task to be, certainly including things such as you mentioned, engineering, and a general putting together of the company business. Railtrack is a business that has been reorganised several times in the course of privatisation and even since. I think they are sensitive, as they should be, and I am sensitive to their sensitivity, (let me put it that way), that you cannot keep chopping and changing. You have got to think it through and then do it, make it stick and make it work. I hope very much to support them in that.

  692. Do you think Railtrack has the confidence of the Government?
  (Sir Alastair Morton) Railtrack is the only game in town, Madam Chair. Investment is the core of the development of the railway we want to have, as opposed to the railway we do have. Obviously efficient maintenance and operation is the core of the railway we have. It belongs to Railtrack. Unless you are proposing re-nationalisation—and I am not—you say we have got to have a Railtrack that is fit for purpose, we have got to work with Railtrack. That is two statements. We have also to partner Railtrack, financially as well as practically, in getting from here to there.

  693. So you would say that the Shadow Strategic Rail Authority has confidence in Railtrack? Presumably, you would not offer to work with them if you were not confident of their ability to deliver what they are supposed to be delivering.
  (Sir Alastair Morton) I think you are jumping to the extreme end of the logic sequence.

  694. No, I am asking, for once in my life.
  (Sir Alastair Morton) Well, Railtrack in the last resort, if Railtrack consistently failed every test put upon them and every test to which it was put, either by the Regulator or by us or by anyone, its customers above all, then you might start saying, "Should they continue to have this monopoly licence to operate the infrastructure?" But that is the nuclear question.

  695. But you do not think we have got anywhere near that yet?
  (Sir Alastair Morton) I do not think we need to be anywhere near that. I do not think we should consider ourselves to be near it but I do think we do consider ourselves as watching Railtrack grapple with a very, very big and difficult task, yes.

  696. I understand that, Sir Alastair, and I am not trying to be difficult, but I think the hazard is that this is an organisation which is a core of the entire system. If it breaks down, or if for any reason it is not performing the function that it is supposed to perform, then not only Parliament but every traveller who uses it is going to be very disturbed. Really what I am asking you is—let me put it very precisely—are you confident that Railtrack can perform the task that it is inevitably being set, at the present time, with its existing board of directors, with the existing organisation that it has; and are you, therefore, prepared to give it total confidence and work with it on that level?
  (Sir Alastair Morton) No, I am prepared to give it very strong support in moving from where it is to where we would all like it to be and they, themselves, would like to be. It is a statement that they have just changed their top management. You cannot form a view of the changes being made by the new management in just hours or days. You have to be close to them for at least a reasonable period of time and it will be a sad business if one says at the end of that, "We need more changes." It is also a statement, such as has already been made between us, that there is going to be a new chairman. He will have the task, with whatever revised board of directors, of taking a view: has he got the right top management or not? That is not going to be for quite a few months to come. That is a practical fact. Therefore, in those intervening months, what are our alternatives collectively? The answer is to work with the Railtrack we have and to support its efforts to do better.

  697. Okay. Now before I ask anyone else, just one other thing then. During that period of time, would you expect to evaluate the work of Railtrack?
  (Sir Alastair Morton) I expect that we will be close to Railtrack. There is no conflict about that. We will be well placed to observe what I hope will be a gathering momentum, not just on the immediate crisis which needs it, but also on improving the way they go about their task, whether it gets to be really good or not by improving it, and finally on preparing to deliver the ten-year plan in its various forms.

Mr Stevenson

  698. Sir Alastair, you have said in your responses that Railtrack are the "only game in town". Railtrack know that as well as anybody, do they not?
  (Sir Alastair Morton) It is reasonable, yes.

  699. Therefore, do you think that there is any validity in the argument that says that the Government have decided to make available through grant, considerable amounts of public money to Railtrack through the Regulator for the West Coast Main Line, which I will talk about in a moment, because the Government have shied away from the only real sanction they have, and that is to take their licence away.
  (Sir Alastair Morton) The quantity of money going to Railtrack was determined by the Regulator. The delivery of that money is from us. I hold the view, for what it is worth, that we do have a very considerable interest in knowing that it is going to be well used and that Railtrack is fit for purpose to use it, to do what needs to be done with the money.

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