Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 60-79)



  60. Are the members of staff here?
  (Sir Richard Mottram) Yes and there are other areas we do not agree either.

  61. Other areas of the report?
  (Sir Richard Mottram) Of this section. So all we are saying, Chairman, is that some of these assumptions are indeed debatable. We accept they are debatable, we are happy to debate them; we do not agree with the conclusions that the NAO have drawn.

  62. Did you put in reservations in writing or not?
  (Sir Richard Mottram) We did, Chairman, on 1 November.

  63. Comprehensively or does it just deal with the odd figure?
  (Sir Richard Mottram) I think it is fairly comprehensive.

  Mr Gardiner: Could we get copies of that?

Mr Williams

  64. We would like to have copies of that, if we may. Could you pass it to our Clerk and we will have copies made for the members of the Committee.
  (Sir Richard Mottram) Yes I will, Chairman, yes.

  Mr Williams: Nigel, I am sorry we cannot take this dispute further until we have had a chance to see the document. You carry on.

Mr Griffiths

  65. Paragraph 1.17 on page 15: why did the Department not insist that the LCR comply fully with its obligations to supply financial information?
  (Sir Richard Mottram) Because essentially what the Department did was it had a dialogue with LCR in which it was trying to build confidence in the project. It was satisfied with the nature of that dialogue and it was reasonably satisfied with the answers that it was being given.

  66. If it was reasonably satisfied, what were the areas where there were some, as that suggests, doubts?
  (Sir Richard Mottram) As it comes on to explain, the concerns did develop and then the dialogue became more active.

  67. So to build confidence with LCR you are saying that the Department did not ask it for its financial information which it had readily agreed to supply as part of its obligations?
  (Sir Richard Mottram) What I am saying is, as the report explains, we were talking to LCR and what we did not require of them were written reports about the position.

  68. And why did the Department at 1.18 instruct its advisers not to press LCR for Eurostar revenues?
  (Sir Richard Mottram) Because we were essentially in a dialogue with them where we were trying not to micro manage the beginnings of their project.

  69. Does that mean then that asking for information and having that information is micro managing?
  (Sir Richard Mottram) I think it means that we could have pressed for more information, we could have pressed for it in writing and as the project began to unfold and get into difficulty, that could have led a loss of confidence in the project. The Department decided not to do that.

  70. A loss of confidence by whom?
  (Sir Richard Mottram) A loss of confidence by others, including the banks.

  71. Were you obliged to pass that information to others including the banks?
  (Sir Richard Mottram) No.

  72. So it could have been handled by the Department?
  (Sir Richard Mottram) We were if it was in writing.

  73. You were obliged?
  (Sir Richard Mottram) If we were receiving reports in writing which called into question the state of the project we were required to pass those to the banks.

  74. So this was a "don't—
  (Sir Richard Mottram) As I think 1.20 explains—

  75. —it was a "don't ask don't tell" sort of set-up?
  (Sir Richard Mottram) This was an "ask but don't ask in writing", to be literally true.

  76. Is that not a recipe for potential trouble?
  (Sir Richard Mottram) I do not think it is in this case because that was not the reason why the project ran into trouble, if you see what I mean, and the banks themselves were not exposed in an unfair way as a result of this practice.

  77. I do not want to abuse the time I know the Chairman has added on to me, therefore with some reluctance I will move from this. The undertakings that were given to provide the services to the West of England, to Wales, the Midlands, the North of England and Scotland; are they now being renounced?
  (Sir Richard Mottram) The position is that no final decision has been taken.

  78. Why has the company been allowed to resile from what was in the original Act and, I understood, contract?
  (Sir Richard Mottram) I do not know whether it was in the original Act, but the reason is that our assessment is that these services are doubtful economically, in essence.

  79. I think Section 40 of the Channel Tunnel Act did require BR to prepare plans.
  (Sir Richard Mottram) That is right and plans were prepared and train sets were allocated. But in recent years the Department has looked again at this case and employed consultants to do this and the consultants published the result and, as the Department has made clear in the light of that work, we have yet to take a final decision on the right way forward on regional services.


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