Examination of Witnesses (Questions 720
WEDNESDAY 29 NOVEMBER 2000
720. Surely the fact that they introduced new
rails, as we heard from Railtrack, and then within a year they
start to break up, it seems to me as if there is not the necessary
research and development being undertaken before they introduce
this new product. We hear of new trains that are lying in sidings
for years in some cases. Why is that being allowed to happen and
is it not your job, as you said earlier, to put something in to
make it all stick together? Your job is to apply the glue, is
it not, to this?
(Sir Alastair Morton) I think you have moved on a
bit from research and development. To take the first one, the
rails. The rails in question: the last significant change that
I am aware of was in 1990 or 1991, when these harder top rails
were brought into the railways. There is no recent change in type
of rail of any significance that I am aware of but that would
require asking Railtrack. However, I do not think there has been.
So the question of why they are starting to break up is part of
a puzzle. The thing I said in public yesterday, that this accident
has spooked the railway, is because people cannot find a correlation
between the particular cast at a particular mill that produced
a particular rail, who installed it by what method using what
equipment, the rolling stock which has run over it, the weight
of traffic that it takes. This does not appear so far to have
any correlation. I suspect it is a detective job that is going
to produce answers but it has not produced them yet. Therefore,
the question of research into why this is happening is complicated.
However, I am clear, from being reported to, that Railtrack has
involved more outside experts than you can shake sticks at in
this question already. Our coming in and banging the table and
saying, "Are your outside experts doing the work you have
been paid to do"
721. But, Sir Alastair, do you not think that
this is one of the problems? We have asked Railtrack how much
engineering expertise have they got in-house at every level. What
concerns this Committee is that even after they moved all the
chairs, they still may not have sufficient engineering expertise
throughout the whole of the organisation to check the quality
of the contractors' work. With respect, I would be quite happy
to take over Railtrack tomorrow, but I can assure you one of the
first things I would do would be to appoint engineers.
(Sir Alastair Morton) I think you have every reason
to be keen for them to have more engineering.
722. What is your input in that respect?
(Sir Alastair Morton) Our input is the one I was talking
about earlier. We want Railtrack fit for the purpose. That means
we want Railtrack able to hold up its end of the business of controlling
a maintenance programme, controlling a renewal programme, controlling
an enhancement programme to our satisfaction or we will be saying
why should they be paid for it and getting public money?
723. It is a good question, is it not?
(Sir Alastair Morton) It is a perfectly good question,
I am not against the question at all. May I just come to the question
of rolling stock because that is where I think you did go on to?
(Sir Alastair Morton) There is a very, very disappointing
record in the introduction of new rolling stock. Historically
railways in this country have the happy habit of doing a couple
of prototypes and running around this network for a couple of
years and then taking them back and rebuilding. It is not a good
idea but, anyway, it is not an idea that is possible nowadays
because you have all the different customers and the different
routes that they go on, you have got Railtrack and you have got
a lack of capacity to permit people to run around testing things,
which is a problem. As a result this rolling stock has been designed
by the manufacturers, probably pushing forward in terms of performance
and quality quite a bit from the last generation, and has been
presented to Railtrack and, lo and behold, has not worked properly.
That is partly because it has been badly built. It is like the
worst days of British Leyland, quite seriously, bits and pieces
falling off here and there. It is partly because of the lack of
compatibility between this malfunctioning rolling stock, or even
when it is functioning, and the track on to which it is being
put. That is partly due to the fact that Railtrack has not in
the past made enough data available on the conditions of whichever
strip of track. The list goes on. Basically there are faults on
Railtrack's side and there are faults on the manufacturer's side.
I think the train operators and the rolling stock companies who
ordered these trains showed inexperience in going for an engineering
specification, a technical specification, that was not pre-harmonised
to everything and something. It probably could not have been,
to be honest. You had to start somewhere, you ordered the rolling
stock, it arrived and if it was in good condition it probably
still would not all work because it would have incompatibilities
with the network.
Chairman: I am sorry, there is now a division
in the Commons, I must suspend for 15 minutes.
The Committee suspended from 4.33 pm to 4.41
pm for a division in the House.
725. Sir Alastair, you were in the middle of
explaining to us the rolling stock problems that there are.
(Sir Alastair Morton) I got as far as saying there
is a problem on both sides, it is deeply unsatisfactory and we
are vigorously involved. An executive of the Strategic Rail Authority
chairs something called the Long-Term Group which brings together
Railtrack, manufacturers, ROSCOs and TOCs with us. It just worries
away at this problem being constantly surprised by the way both
sides let themselves down.
726. It is not quite both sides, is it, because
the ROSCOs must have a very important part to play in this? If
they are the financiers of the various new rolling stock, the
way that they agree to pay for and accept delivery of the rolling
stock must be enormously important.
(Sir Alastair Morton) I think that is not causing
the delays that I was specifically talking about, the inability
to complete delivery. That may hold up the placing of orders,
although I am not aware that it does very much. They have been
built and now they are sitting in sidings that is the business
I was particularly addressing. That is a struggle between manufacturers
with an inadequate product facing Railtrack with inappropriate
(Mr Grant) Just to add something. We did have a Short-Term
Action Group as well and they had some success.
727. Is this a different one from the Long-Term
(Mr Grant) It is. It was specifically to try to get
some of these trains that were parked in the sidings on to the
network. There was some success, particularly with the LTS and
SWT, the c2c franchises that Sir Alastair mentioned.
728. Given that there is a record being taken,
would you be kind enough to spell out what it was.
(Mr Grant) c2c is the trading name of what was London,
Tilbury and Southend, and there was also South West Trains. They
did clear the safety clearances and then the problem was the reliability
of the trains and they were withdrawn. One of the areas we are
looking at with the industry is testing facilities. That is part
of the Long-Term Action Group.
729. My concern, and the reason I ask these
questions, is that it was my understanding that the Shadow Strategic
Rail Authority, and tomorrow you will have lost your shadow, was
on the basis of the whole question that you are the glue in the
middle that is supposed to put all this together. It seems it
is a bit like superglue, it is not working, there is not the melding
that there should be to industry and we are not seeing direction
as to where we are going at this stage.
(Sir Alastair Morton) I understand the concern. I
am anxious to maintain the point that we do not manage any of
the parties in terms of giving instructions: go and they go. We
are not the operators or controllers of any part of the action,
so we are at another level. The concern that this should be such
a problem for so long is very much on our desk. When you have
written to the Chief Executives of Daimler Benz train division
and you have written to the Chairman of Bombardier Trains Group
and so on, and said "you are really making extremely shoddy
products, would you kindly do better", you are starting to
use up the large shots in your locker. You have frightened their
subordinates, you have annoyed the bosses, you have made it clear
you are not going to be sympathetic to their yells for help to
bully Railtrack on their behalf. At the same time, if you have
irritated Railtrack to the point where people are downright furious
and they say "I have got a job to do, you are telling me
how to do it", and I say "If the way you are doing your
job is not actually producing a proactive attitude to bring rolling
stock on to the network as opposed to a reactive attitude saying
`well, I have measured it again since you brought it here and
it still does not fit'", I am quite happy for them to be
miserable. I think you have got to be proactive. We have pushed
these people and the question is what do you do if the pressure
does not work? The answer is you go to other suppliers. We have
been active in encouraging other suppliers in response to the
inquiry we put out for Mk 1 replacement stock. Similarly, and
you go above the particular management, the divisional management
of Railtrack, and you talk to the top management at Railtrack
and we are then back in the problem we were talking about of Railtrack
being fit for purpose at the top level. It is just another point
on the list that we have under discussion with the Railtrack top
730. You are making that sound very, very pessimistic
and you are virtually saying to me, I do not know about the other
Members of the Committee, this fragmentation that there is within
the industry, even with your role, is never going to resolve this
(Sir Alastair Morton) I did not say that.
731. I am not trying to interrupt you, but just
to take it forward, who has got the blueprint? Who is saying "we
have got to go down the road 10 years because we have already
got this 10 Year Plan on investment"? Who is working towards
that? Where are the targets in the system? What are each of these
fragmented companies doing that is going to be examined, and I
suggest the examination should be by you, in order that the public
can see that there is direction starting to come into the system,
that we are out of this crisis management and we are going to
achieve something? Or, as I am beginning to believe, is it impossible,
that it will never happen unless instead of being the rail authority
you do become the management authority?
(Sir Alastair Morton) Short of that last point, which
is clearly where we part company because I am not appointed to
become a management authority, the answer is you have to take
what action that is within your powers, or within your influence,
to improve the performance of those that are going to be in the
industry longer term, medium to long-term, and stop doing business
with the ones that should not be in the industry medium to long-term.
That is about your choice. You can vote with your feet by doing
no more business with them but you cannot actually veto, from
where I sit and from where Mike Grant sits, a private sector company
that wants to do business with that inadequate company over there,
whatever it is. Where is the powerperhaps you know where
it is, Mikethat enables us to ban company x, y, z from
getting any rail business? I am not aware of it. We can make clear
our attitude. We can say "we will not do business with them".
For example, in the business of new franchises, which is our business,
we have to pre-qualify people, people who in principle are willing
to discuss whether they can have a franchise, and then we have
to short list them as being people whose ideas are worth talking
about and whose performance is at least possibly good enough for
the longer term franchises, and then we have to choose a preferred
bidder and get to the terms and conditions, which will be very
different from the existing ones. There we have a direct contractual
relationship with the future franchisees. Maintenance contractors
we have no relationship with. ROSCOs we have no relationship with.
We may buy some Mk 1 replacement stock because we are concerned
that that programme can go ahead and does not get sidetracked
by talk of refranchising and who is going to be the buyer. We
buy them and we pass them on to whoever the new franchisee is,
we do not own them long-term. Therefore, we will have a contractual
relationship with the supplier and we will make it hurt if these
things do not work. So you go on across the industry. But what
you do have is a fragmented industry, that is what happened at
privatisation. Therefore, in your discussions under regulation,
under statute, under franchise agreement or under other contract
or under rental lease or whatever, what is your locus to say what
you want and have it done? For the rest, you are simply trying
to influence. We do lead, I do not think we are accused of not
doing that. You have got to understand that this is a system that
is now not centrally controlled and that was a political decision.
732. Honestly do you think it is going to work?
(Sir Alastair Morton) I think it is going to work.
I think we are all going to have more aggro than we would like
to have and really need to have along the way because you cannot
get so many parties involved without them having different ideas,
so perhaps we need to have the aggro.
733. But it will work?
(Sir Alastair Morton) Define "work". When
15 out of 16 trains are on time, or when there is no more enhancement?
Mr Donohoe: You set these standards.
734. Not taking too many hours on a journey
into London and out again, or into Manchester and out again every
day, would be a start, would it not?
(Sir Alastair Morton) In 1997 performance reached
its peak but it has fallen back a bit since. The number of trains
that were on time, as measured with whatever it was, was 90 to
92 per cent.
(Mr Grant) 92.5 per cent.
735. When do you see it coming back to that
point of efficiency that there was in 1997?
(Sir Alastair Morton) That is a long subject but remember
one of the reasons why it is down from that point is lack of resilience
in the system. When things go wrong, how quickly does it recover?
Why is the system not very resilient? It is not very resilient
because sometimes it is short of drivers, so you cannot just put
on another train because you have not got a driver even if you
have got a train. It is not very resilient because there is a
lack of rolling stock. That does not get cured by just building
new ones because quite a lot of the new ones are to replace old
ones that by law have got to be taken out of service. There is
a lack of resilience because of space on the network, you cannot
go round any more because there is a scheduled train going that
way, which is not always possible anyway but where it was possible.
There is a lack of resilience because the maintenance requirements
of the network, having been whatever they were, have now become
more and, therefore, you cannot go round, as it were, or you cannot
go over that track alongside because somebody is doing maintenance
work on it. You have got an ageing network that is showing its
age, that is much more crammed full than it was and is lacking
the resilience which is actually a large part of performance.
It is lacking in performance for reasons of age, from time to
time of management and lack of resilience.
Chairman: It all sounds very reasonable.
736. My last point I did not get an answer to
because I mixed it up. Do you have a five year plan that mirrors
that of the intention of Government to have investment?
(Sir Alastair Morton) We have a plan to pursue the
investment programme spelled out in the 10 Year Plan, to pursue
performance levels spelled out in our specifications for new franchises,
to pursue service levels that will satisfy customers that we have
spelled out the requirements for in getting the new franchise
requirements. Yes, that is what we are going to bring out.
737. So when will we see that?
(Sir Alastair Morton) January. It will not say "the
train to Wimbledon will leave at four minutes past four in the
afternoon, or else", it will say "there will be services
to the London suburbs" as it were.
Chairman: I think it would be nice if we were
able to say "the trains will leave".
738. I can recollect when, Sir Alastair, you
were trying to refinance the Channel Tunnel and I seem to recollect
that one of the conditions that was put by the investors on that
refinancing was that you were in charge of the company because
they had confidence in you.
(Sir Alastair Morton) That is a happy memory.
739. So it is true to say, therefore, that investors
in a company do have influence over the board of the company.
So when you said earlier that Railtrack is a private company and,
therefore, you, and presumably the Government, have only limited
influence over who is on the board and who is in the senior management
of that company, that is only partially true. The bankers, the
investors and, therefore, the Government have considerable influence
over who is on the board of the company.
(Sir Alastair Morton) The Government is a very, very
small shareholder in Railtrack.