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


Examination of Witnesses (Questions 800 - 814)

WEDNESDAY 29 NOVEMBER 2000

SIR ALASTAIR MORTON AND MR MIKE GRANT

  800. Would you be prepared to let a company go bankrupt?
  (Mr Grant) Yes.

  801. So you would be able to look for alternates should that be a real possibility?
  (Mr Grant) That would be the intention.

  802. Do you think skills shortages are going to make it difficult to implement the rail investment programme?
  (Sir Alastair Morton) It is a problem. It follows on from what I was saying about consultancy. There is a shortage of skilled resource in the industry at all levels from skilled tradesmen upwards, or sideways. The cure for that has to lie not only with training and college courses and so on, it also has to lie with employment prospects. What we are basically proposing is a ten year process on the railways of semi-continuous, continuous investment, growing investment, as well as rising levels of operation, operation complexity and interest for careers and so on, but continuity is the important point. If people see that this is an industry that is going to be going forward for years to come we hope that they are going to come forward and want franchises and seek to do business as contractors in whatever way, whether it is meals or maintenance or whatever. Then, further we want to believe that those firms, or the franchisees, or Railtrack, or whoever, are going to be offering more and more employment, including the rail consultancies, to graduates and to others, so that you get a growth field into the sector that has not been present in this sector for a very long time.

  803. Have you asked Railtrack whether they intend to persist with their previous policy of trying to knock down the numbers of contractors available for maintenance work in the industry?
  (Sir Alastair Morton) I think they were pursuing a policy which had a good side to it, which was to consolidate on strength. I do not know what their new plan is. I know they suspended the preparation and negotiation of new generation maintenance contracts, the IMC 2000 contract. They have suspended that for the moment while they are in the present crisis.

  804. Is this not the moment to be asking them questions about their attitude and their policies into the future?
  (Sir Alastair Morton) I think soon will be the moment but I think now they have got to focus on getting the recovery in place.

  805. So you will be asking them about the number of people with safety certificates, the way they have been handing out contracts in the past and the effect that moving contracts around vast numbers of contractors has actually played on the level and quality of maintenance on the railway?
  (Sir Alastair Morton) Without being an expert in the specifics, yes we will be interested in how they propose to contract-out the maintenance. There is the question that I have referred to, and they have referred to, of exactly who takes responsibility for what at the interface between them and their contractors because the risk reward ratio for contractors is part of the pricing of maintenance services.

  806. Sir Alastair, forgive me, but I think if you read this Committee's Reports you will know that we are quite clear where the safety case responsibility lies and it lies with Railtrack.
  (Sir Alastair Morton) Yes.

  807. And it does not matter who they employ or what conditions they lay down or what sharp lawyer they have to draw up a contract. In fact, the reality is that they have the ultimate responsibility for the safety of their passengers.
  (Sir Alastair Morton) That is correct.

  808. Whatever they call them—they can call them customers, they can call them whatever the like—the ultimate safety responsibility lies with Railtrack.
  (Sir Alastair Morton) That is true, I agree.

  809. It might be useful occasionally to remind them of that, might it not? Can we ask whether you think that there are conflicting pressures for network safety performance and growth?
  (Sir Alastair Morton) No. I think there are conflicts at times but they are not fundamental conflicts. What do I mean by "at times"? I managed to annoy a lawyer, which pleased me, in front of the Cullen Inquiry when I suggested that the present situation is like a waiter stepping on to an ice rink to cross it in order to deliver it a tray of drinks and slipping, and while he is trying to get his balance back on the ice rink in front of all those people he does not pay the attention that he should to keeping the liquid in the glasses. Railtrack is somewhat in that position, it has lost its balance. If it tried to do too many things at once at this moment it would have difficulty delivering on all of them. That goes for performance and safety, performance and growth, safety and growth, whatever. That is not the case when you have got your balance back. When you have got your network operating smoothly on an acceptable level it should be both safe and performing acceptably and it should be possible—another factor—to grow it. All of those are demands on the management of the network. If it is in kilter, if it is running smoothly, if it is not delivering rude surprises and blows to the solar plexus, as it were, you should be able to deliver safety performance and growth and that is the planning assumption which a stable, satisfactorily operating Railtrack can deliver in conjunction with users and funders, whoever else, contractors. A network on which you get safety, you get performance and growth. You do not have to pick between them once you have got the thing operating properly.

  810. I think we all hope you are correct. The only other thing I would say, before I say thank you, is if your waiter had a good employer he would not be put at risk in that manner and if he fell over and dropped his tray and cut himself on the glass he might have a different attitude, might he not?
  (Sir Alastair Morton) I think your observation is a shrewd one, Chairman.

Mr Stevenson

  811. One question. Earlier on when I was asking you about your attitude towards Railtrack's preferential shares, you said that the SRA had recommended that not be done?
  (Sir Alastair Morton) Had not recommended it, yes.

  812. Had recommended it not be done, yes. Is it possible for your authority to let the Committee have the detailed reasons why you recommended that?
  (Sir Alastair Morton) No. I think they were the ones that I stated here, that you get more complications than you get benefits that way.

  813. So it was as simple as that?
  (Sir Alastair Morton) It was a business judgment from me, as Chairman, in advice to Ministers.

  814. There is no more detail available other than that?
  (Sir Alastair Morton) If they had the desire to be proprietors of large quantities of shares in Railtrack I am sure they would have come back to me.

  Mr Stevenson: Thank you, that is all.

  Chairman: Thank you very much. I am sorry we have kept you quite so long but it has been very useful. Thank you.





 
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