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


Examination of Witness (Questions 860 - 879)

WEDNESDAY 6 DECEMBER 2000

MR T WINSOR

  860. That marks you out as different from the rest of the railway industry for a start.
  (Mr Winsor) My track quality specialists and performance advisers come with me and they explain to me what I am shown and they tell me whether or not we are having the wool pulled over our eyes.

  861. And they do have engineering and railway experience.
  (Mr Winsor) Certainly. They have 20 to 30 years, experience in the railway.

  862. That also makes them unique.
  (Mr Winsor) I am hoping they will not be offered jobs by Railtrack!

Mr Bennett

  863. Were you aware of all the problems which Railtrack's track had before Hatfield? If you had all that technical expertise that had been looking at all of this, you knew what was wrong.
  (Mr Winsor) No, the Office of the Rail Regulator was not sufficiently equipped to have that degree of information from Railtrack for a number of reasons. My predecessor did not appoint a track engineer until 1997, so that is four years. I do not know why he did not do that, but nevertheless the track quality engineers we have now have been looking at the quality of information which we get from Railtrack and they find significant deficiencies in it. They have been improving that information all the time. As part of the periodic review, we are requiring a level of asset condition monitoring and asset spending unprecedented in the railway industry and that requires Railtrack to have good knowledge of its assets. We as a regulatory authority cannot be out there with orange jackets inspecting the track ourselves. That is a matter for Railtrack and on an audit basis the Health and Safety Executive. We can specify from Railtrack what kind of asset quality, asset condition measures they should be using and reporting to us. I can go into that in as much detail as you like, of the new form of accountability we are establishing for Railtrack.

  864. But you have been in office now for over 12 months.
  (Mr Winsor) Correct.

  865. In that time you drew up the review which was to decide in effect the finances of the industry and you drew it up on inaccurate information, you did not actually know the state the railways were in when you did that review. Is that right?
  (Mr Winsor) There is a considerable amount of information about the railway and we appointed consultants to assess that information. This is information coming to us from Railtrack about the amount of work they needed to do on signalling, on track and on other forms of activity. I am not saying there was no information: I am saying the quality and amount of information on which we based the review had to be achieved at a very considerable effort which will obviate the necessity for such effort in relation to future reviews because we are going to establish from April 2001 a way of measuring and establishing the present condition of the network so we can see very clearly what Railtrack is doing, how well it is doing and get the information much more easily.

  866. What you have just told me in plain words is that they pulled the wool over your eyes as far as the state of the railways is concerned at the present moment.
  (Mr Winsor) No, the contrary. We had to try extremely hard, and we have succeeded, in understanding the condition of the network in order to make the conclusions in the periodic review. That does not involve a detailed sleeper by sleeper assessment of the condition of the track.

  867. This is not sleeper by sleeper it is the state of the whole lot, is it not? There are problems almost everywhere and you just did not know about them.
  (Mr Winsor) As far as matters of safety are concerned, I am not the safety regulator I am the economic regulator. Railtrack's reaction to the Hatfield accident is seen by many in the industry as an over-reaction. They asked the question: did Railtrack know that the track was unsafe and allow trains to run over it or did Railtrack not know the condition of the track? Those are questions which are going to be determined by the inquiry into the accident, not in any other form. Nevertheless, we have been establishing with Railtrack very significant forms of knowledge and accountability for the condition of the network which will serve the industry very well in the future.

  868. But you did not know when you did your review the number of cracks and problems that were in the rail tracks.
  (Mr Winsor) We knew a great deal about the condition of the network. Railtrack made submissions to us as to the amount of work they needed to do on the network. They asked us for £3.25 billion for track renewals. Having assessed the condition of the network with our consultants, Booz Allen & Hamilton mainly, an international firm of engineering consultants of considerable repute, we decided that Railtrack had not asked for enough money. So we actually gave them £250 million more than they asked for. That was through our knowledge gained in a difficult way from the condition of the network.

  869. Was that the sort of money they are actually having to spend since Hatfield?
  (Mr Winsor) The amount of money they are having to spend since Hatfield is not yet known. They are spending without knowing what this activity is going to cost them and they are going to assess the bill later.

  Chairman: It sounds as though you should have sent them your consultants.

Mr Bennett

  870. With your technical skills now, do you think the amount they are spending is more than you allowed them?
  (Mr Winsor) We are not sure how much they are spending at the moment; that is information which is still coming in so I cannot answer that I am afraid.

  Miss McIntosh: May I remind the Committee of my interest in this subject.

  Chairman: Miss McIntosh has declared her many interests.

Miss McIntosh

  871. Three. When did gauge corner cracking become a phenomenon in this country?
  (Mr Winsor) I am not an engineer and I cannot answer that question directly. Railtrack's knowledge of gauge corner cracking is not brand new. Gauge corner cracking is a phenomenon which has been understood for some years. The way in which it propagates into the rail is something about which Railtrack is just discovering.

  872. Could you just clarify what authority you have for saying that gauge corner cracking is not a new phenomenon in this country?
  (Mr Winsor) My specialist track engineer with 26 years' experience.

  873. When did it become a new phenomenon?
  (Mr Winsor) He would have to be here to answer that question.

  874. Could you possibly drop us a written note?
  (Mr Winsor) Of course.

  875. In your view would there be any advantages to Railtrack taking the maintenance of the track back in-house rather than having external contractors?
  (Mr Winsor) There may be some advantages for Railtrack to do that. What really matters is how well the chain of command works from the top of the organisation to the people on the ground who are having to do the work. It may not matter very much whether that is in a separate company or whether it is in a single company. What matters is whether the culture, the safety culture and the policy of preventative maintenance, works correctly.

  876. You have very kindly provided supplementary written evidence to the Committee in which you state at paragraph 5, "Given this, I have concluded that £8.8 billion should be paid through track access charges from franchised passenger operators". I presume these figures were based on the forecast of people and freight travelling by rail over the forecast period.
  (Mr Winsor) The figures are arrived at through a variety of means. This is the overall figure in relation to the operation, maintenance and renewal of the network for the next five years. The £8.8 billion is the net figure after you take off the Government grant of approximately £4.6 billion. The total figure is £4.6 billion plus £8.8 billion. It is the amount of money they need to operate and maintain and renew the railway over the next five years. It does net off the income which Railtrack would get from a number of sources including stations and freight operations.

  877. What percentage over the last five years has Railtrack raised from the sale of land which under the new criteria you will not allow them to do? Are you in a position to give that figure?
  (Mr Winsor) I am not in a position to give you the precise figure. If I have understood the point of your question it is that I am going to stop Railtrack getting rid of land.

  878. You specifically say that in your evidence.
  (Mr Winsor) Yes, I do and I look forward to doing it. Railtrack is a very significant land owner and it is very important that land which is beside the railway, which could be used for additional freight facilities, station car parks, station extensions or other railway purposes, is not lost. Railtrack can get more money selling it for non-railway purposes than it can for railway purposes. Therefore I intend to establish a licence condition and this is one of the licence conditions we sought in 1993 and were told we could not have because it was unnecessary because Railtrack would never be privatised. The licence condition in question will impose a control on Railtrack so that it may not dispose of land proximate to the railway for non-railway purposes unless there is no conceivable idea or no reasonable prospect of it being used for the railway. If Railtrack actually loses money as a result of that, then they can be compensated in a different way so as to maintain the amount of money they need for the operation and maintenance of the railway. But this land needs to be protected. I am sad to say that Railtrack is resisting my proposals and I may find it necessary to refer the matter to the Competition Commission.

  879. You may like to enlighten the Committee on how they would be compensated in a different way. My question to you though is: what if the franchised passenger operators cannot pay the amount because the numbers of people and the amount of freight which have been forecast simply do not materialise over the five-year period?
  (Mr Winsor) They will get it from the Government.



 
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