Examination of witnesses (Question Numbers
TUESDAY 1 MAY
100. We do not want to get too much into that.
(Sir Alastair Morton) If I may answer the first one.
I have already made it plain, and I have said it again today,
that we consider, we recommend, we believe, we insist if you like
in so far as we can, that the allocation of funds to the SRA under
the Ten Year Plan must be rethought and reshaped to fit the new
circumstances, because they do not fit.
Chairman: That is the point Mr Stevenson wants
to come back in on.
101. In A Strategic Agenda, which you
describe as a work document, you are pretty critical of Railtrack.
"Many felt Railtrack could assume leadership of the industry;
it did not." That is quite unequivocal. You are also critical
of the fragmentation of the industry under privatisation. My question
to you is the new situation that we are facing is where Railtrack
will be responsible for what is termed its core business, that
is looking after the current network in terms of maintenance and
so on, but new developments will be the subject of different arrangements
with different players, your authority playing a leading part
(Sir Alastair Morton) Correct.
102. Is that not further fragmentation?
(Sir Alastair Morton) Give me the alternative other
Mr Stevenson: I have not got time to do that
but if you can spare me ten minutes outside I will try.
Chairman: You can read what Mr Stevenson said
this morning in Westminster Hall which is very instructive.
103. My question is, is that not more fragmentation?
(Sir Alastair Morton) I do not believe it is. I am
a considerable believer, total believer, in the possibility of
blending public and private finance. I was, if you recall, the
previous Chancellor's first chairman setting up his Private Finance
Panel for him. I believe we now have, whether we wanted it or
not, and to an extent that we may not have wished, a requirement
as well as opportunity that we work out blended financing structures
to invest heavily in rail infrastructure and the rail system in
general. I believe that the capital markets of the world contain
far more money that could be made available to it if it was a
credible series of propositions than we will ever find in the
back pocket of the Treasury. Therefore I am wholeheartedly in
favour of going the private capital route. We have to pick that
up and go with it. I put that forward on 30 June 1999 for the
first time, I repeated it at intervals in the latter part of 1999,
I put it in formal advice to the Government, as I have made known,
in February 2000 and I kept saying it through 2000. Railtrack,
under Gerald Corbett, took a different view, which I have said
before in public, that they should be given more money through
the Regulator's review and they should be left to do it all because
they were the right people to do it all. So there was a disagreement
between Mr Corbett and me, not a personality clash or anything
of these things, simply that he wanted it left to Railtrack and
he did not want anybody else getting on to his network. That opposition
to what I was saying collapsed at Hatfield, if I may say so. It
took until this spring for the to-ing and fro-ing that followed
between Mr Marshall and the Regulator over the funds that were
or were not or should be available to Railtrack to work its way
to a point where decisions could be taken and sums of money could
be defined and new dispositions emerge, which included a number
of conditions in return for easing Railtrack's financial burden
on 2 April. Those conditions did, in fact, take up my recommendation
and apply it on a scale and with a suddenness that I had not foreseen,
I have to say.
104. I am still seeking an answer to my question.
If you have Railtrack as a private monopoly player and in future
it is going to be responsible for its core business and someone
else or some other organisations, including your own, will be
responsible for the development of the railway network, I put
it to you that by definition it is further fragmentation.
(Sir Alastair Morton) It is involving further parties.
105. Thank you. I put this to you with the greatest
respect, and I say that because I do not want it to be misinterpreted,
that I am getting the impression that this is not a strategy at
all, it is reacting to situations.
(Sir Alastair Morton) I have some sympathy with that
having been in this Chair for two years. The point I have made
on several occasions, including today, is that we have been held
up in defining what can be invested where with what purpose in
this network by repeated changes in circumstances. One of the
problems that now exists, and I have just said this, is that the
funding to us under the Ten Year Plan is not necessarily inadequate
but is in the wrong shape and, actually, I would say is inadequate
because of the changes we also spoke of, and therefore has to
be rethought and I am confident that the Government proposes to
do that after the election.
106. Before Mrs Dunwoody drops on me, can I
come to my last question which is about strategy and your document,
A Strategic Agenda, which you describe as a work document.
I also understand that you are going to listen to the players
in the industry. You are going to listen to what they say and
hopefully come out with your strategy some time in the autumn.
That seems to be it. If you are going to listen to what the industry
is going to say, and given the dramatic changes that have taken
place in the last 12 months that we have discussed, how in heaven's
name did you come to the conclusion that when all this new rail
network is built it should be handed over free, gratis to Railtrack?
(Sir Alastair Morton) I do not think I ever said that.
107. It is in here.
(Sir Alastair Morton) Where? Could you read it to
Chairman: Would you like to give us the exact
Mr Stevenson: Do you want to come back to that
so I do not hold people up?
Chairman: If you would like to look for that.
Mr Stevenson: Yes, I would.
108. I have one or two quick questions. Train
protection: can you tell us anything useful about that?
(Sir Alastair Morton) I am not sure there is anything
to add to what is already in the public domain which is that TPWS
is going ahead and that European train control is required to
be added into the network, presumably at time of upgrades but
with a final date set by Messrs Uff and Cullen.
109. And you think those targets will be achieved?
(Sir Alastair Morton) I did not say that. It is going
ahead, I said.
110. Do you think that the targets will be achieved?
(Sir Alastair Morton) I think it will be a considerable
achievement and a considerable extra expense compared with doing
it up during upgrades, if those targets are achieved, because
not all of the lines in question are due for upgrades by that
date so it will have to be special projects. I also think that
there is a considerable problem of resource, human resource, skilled
resource, for the programme in question and the development of
the train control system. Always remember, no matter what passengers'
association has said what, there is not functioning in Europe
today a system such as we will be installing on our faster lines.
There are systems under development, there are systems in action,
like our ATP, here and there, but there is not covering any network
anywhere in Europe a complete system that is in normal operation.
It is still under development. The human resource for it is very
scant and the cost of doing it as a special project as opposed
to during upgrades is quite a lot extra and, therefore, like the
other thing, I am a bit sceptical.
(Mr Grant) If I can just add something to that. There
is an industry team being put together to look at the plan and
they expect a report by March 2002 whether it is achievable or
111. Channel Tunnel Rail Link: is that now all
going to be running smoothly?
(Sir Alastair Morton) It has not yet passed over to
us. I am sorry to seem to duck the question. It is due to pass
to us some time later this year, I think, is it not?
(Mr Grant) Yes.
(Sir Alastair Morton) There is a team working in the
Department which will pass over to us with it, so our relationship
in the future will be direct with London Continental and the parties
to the project. I am told, contrary to press reports, that phase
one is on time and on budget, but I am afraid I am not in a position
to give you a certificate to that effect.
112. You talked at the beginning about how pleased
you were to have the West Midlands Strategy in place. When are
you going to have a strategy in place for Greater Manchester?
(Sir Alastair Morton) There is a study, as you know,
that has been going on, like the West Midlands one, for about
two years which I launched in Manchester and it is due to report
in June. Depending on what it says the parties to it, which would
certainly include Railtrack as network operator and us as principal
financial motivator, shall we say, are likely to work together
on it, but until I have seen it and know that we are going to
agree on it it is difficult for me to say 1 July or anything like
113. The difficulty is that in the modernisation
of the West Coast Main Line some of the decisions on Greater Manchester
have already been pre-empted.
(Sir Alastair Morton) I am afraid that is correct
in many parts of the country.
114. Is it not essential that you get your strategy
in place as quickly as possible?
(Sir Alastair Morton) No. Whatever we do between January
1 2000 and January 1 2002 on the subject of Greater Manchester
will have to accept the West Coast Main Line upgrade as a given.
There is nothing anyone can say to change the fact that the West
Coast Main Line upgrade is half way to two-thirds of the way through.
In fact, as I am sure you are very interested in the Commonwealth
Games, you need to be praying that it is damn nearly finished.
115. I was going to ask you at the end of this
session whether you are going to give a guarantee that the rail
lines will be functioning well for the Commonwealth Games?
(Sir Alastair Morton) There are two problems in that.
One is the work programme to actually instal the upgrade in the
Manchester area and the second is to make sure that what is newly
commissioned works well, which is not the normal practice in British
Rail history or in recent history on the network. No, I cannot
give you that guarantee. It would not be appropriate for it to
come from me anyway.
116. It would be a pretty appalling advert for
the rail system in this country if during a prestige event like
that the railway was not functioning efficiently, would it not?
(Sir Alastair Morton) I suspect that is probably correct
but I cannot call to mind the date of go ahead and what was said
then, so I will not comment, I am afraid.
(Mr Grant) I visited Manchester South last week and
it looks pretty tight. There is some float but it does look tight.
Chairman: What does that mean?
117. Does it mean that it will not work?
(Mr Grant) From what I understood it means there is
a gap of about two months between the end of work and the start
of the Commonwealth Games. Obviously as things progress, at some
point if the project slips backwards it slips into the time of
the Commonwealth Games.
118. What about the TransPennine proposals that
you are looking at? Are those dependent on this strategy for Manchester?
(Sir Alastair Morton) In part, in that if you are
going to bring express trains through Manchester on their way
from Leeds to Manchester Airport you had better not knock over
anything on the way, as it were. The junctions and grade separations
and whatever else, extra platforms needed by TransPennine Express,
and also by the future Northern franchise, and what is needed
for light rail development in Manchester, of which there is going
to be quite a bit, and freight, these must all mesh together.
If you like, the TransPennine Express, which is out to franchise
renewal process at the moment, is the enabler of the process,
or one of the two enablers because I think light rail could be
described as another enabler that is having its own development
now. Manchester is going to get a better rail borne public transport
system out of the combined improvement of TransPennine Express,
which are the high speed limited stop, or non-stop, InterCity
trains east-west across the Pennines, the Northern franchise,
which is many slower or more frequently stopping trains over Lancashire,
North Cheshire and Yorkshire, light rail and the freight development
that is very necessary across the Pennines too.
119. But my constituents who go in on a daily
basis from somewhere like Heaton Chapel or from Reddish North
are not going to get a better service, are they, because their
trains are going to get second or even third place to these InterCity
(Sir Alastair Morton) This is South Manchester, is