Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 160 - 179)

WEDNESDAY 30 JANUARY 2002

RICHARD BOWKER AND PETER TREWIN

Mr O'Brien

  160. Mr Bowker, in the north of England, there is a strong view that you have renegued on the promises that were made originally, you have turned your back on the transport provisions in the north. What have you got to say to those allegations?
  (Mr Bowker) I believe, Mr O'Brien, that this is a balanced Plan, it does take account of all regions. I am afraid it does have a degree of prioritisation about it, all plans do do that. But, in terms of particularly in the north of England, which is a part of the world I know very well, I mentioned before the Rail Passenger Partnership schemes, a very significant amount of investment has gone into the north of England through those things. We are about to go out to the market to replace the Northern Rail franchise, which will give us an opportunity to look and see what enhancements and what benefits we can bring through that process, and really to sort of address making sure that we have a better-performing railway there; so that will be a positive step forward. We are about to restart, to a conclusion, the process for Trans-Pennine Express. So, actually, there is an awful lot of activity that is under way now, addressing key performance and enhancement issues in the north.

  161. Eighty per cent of the planned expenditure in your Plan is in the South East; so that does not speak highly for any real investment in the north?
  (Mr Bowker) But you do not need to spend the same amount of capital across the whole UK to deliver the same benefit. If I may give you an example. I went to Wales recently, where we had just announced a Rail Passenger Partnership scheme for about £half a million, only £half a million, to provide extra carriages for services on the Taff Vale line; it is only £half a million, and it has transformed the journey experience for people coming down that route into Cardiff in the morning. We cannot do that in London and the South East. If we want to do Thameslink and increase the capacity of that route and build a brand-new station at Blackfriars and new bridges and a new junction at Borough Market, we are talking hundreds of millions of pounds, and you will get benefit; but it is possible to spend small amounts of money elsewhere and still get significant benefit from that.

  162. My constituents who travel in the West Yorkshire area are still suffering overcrowding, they are still suffering trains cancelled and delayed; they are demanding a better service, programmes for improving facilities at stations have been delayed. And are you saying then that that is not worthy of consideration?
  (Mr Bowker) Not at all, no, I am not saying that. Overcrowding, for example, is being addressed; there is again an RPP scheme for additional carriages for the Aire Valley electrification, that is in progress. As far as trains being cancelled and delays, that, I believe, is a matter of good management, and good management between the operator and the infrastructure provider, and that has got to be addressed, and I do not think anybody would ever disagree with that. As far as stations are concerned,—

  163. But you are the infrastructure provider?
  (Mr Bowker) No; Railtrack are the infrastructure provider.

Chairman

  164. We will come on to that in a minute, I think.
  (Mr Bowker) That is about management, in terms of delivering a—

Mr O'Brien

  165. Are you prepared to review the situation, to make sure that the north of England does get its fair share of the resources in this Plan?
  (Mr Bowker) We will constantly keep this under review. I believe, today, this is a balanced Plan, with everything we are trying to do in it; but we will constantly look at it.

Chairman

  166. You have said you want more public sector money; are you saying, therefore, we are going to need a greater public sector contribution in the first years of the Plan than initially was decided upon by the Government?
  (Mr Bowker) I am not sure I have said we need more than there is here. This Plan has £33.5 billion in it, and today I believe that that is the right place to start from, this Plan is fully costed. I cannot honestly say that we definitely need more or less money, because the analysis—

  167. No, but you did say the Strategic Plan assumes the public sector will need to support much of the early stages of certain projects?
  (Mr Bowker) And that is the case.

Mr O'Brien

  168. Why have you changed the Strategy from passenger journeys to passenger kilometres?
  (Mr Bowker) I do not know, but I can check that and come back to you.

Chairman

  169. Can you give us a little note on this?
  (Mr Bowker) I will.

Mr O'Brien

  170. That is an influence in the Strategy, that is an influence, that instead of passenger journeys, which it was originally, it has gone on to passenger kilometres?
  (Mr Bowker) Absolutely. I would not want to mislead you by not getting it entirely correct; but I will give you a note on that, if I may.

Mrs Ellman

  171. Can fare increases be kept below inflation?
  (Mr Bowker) The assumption that we have used is that, for regulated fares, which make up about 40 per cent of all fares, they will be kept at RPI-1, which is the regulated fares control. And the working assumption here is that unregulated fares, on average, and that obviously is a very important thing, because it is a basket of many factors, will rise at RPI.

  172. But, if that is on average, that could mask very significant differences, could it not?
  (Mr Bowker) They are unregulated; because they are unregulated, there is a degree of market forces that are allowed to work upon them. Some undoubtedly will be higher than inflation, some undoubtedly will be lower. What we are doing, however, we are about to undertake a major exercise on looking at fares strategy, which will be widely consulted upon, to see whether the structure that we have currently is the right one.

  173. So you are prepared to look at the structure again and your relationship with the regulator and Ministers?
  (Mr Bowker) That is what we will be doing, yes. We have got no preconceptions on the fares strategy.

  174. When will you be putting proposals for a Company Limited by Guarantee to the administrators?
  (Mr Bowker) We will not be doing that. There is a CLG bid team, which is now in place, which at some point will be putting forward its proposals.

Chairman

  175. We are going to spell it out, are we not, CLG?
  (Mr Bowker) Company Limited by Guarantee, indeed; and they are responsible for putting in their bid. They have a bid team and they will be doing their own bid.

Mrs Ellman

  176. So what is your role in that?
  (Mr Bowker) We have two roles, and there are elaborate and effective procedures in place to make sure that the two roles do not get confused. One role is what is called "sponsor", but effectively it is the mechanism by which the bid costs are paid for CLG, but that is a very simple, mechanical exercise. The rest of the team that I have for CLG is negotiating with the CLG bid team, to put in place the mechanisms that we believe we will need for CLG to be effective. We would do that with any bidder, that is not special to CLG, any bidder that wants to do that we will talk to.

  177. Do you have any assessment of when the bid will be ready?
  (Mr Bowker) There is a huge amount to do, and it is the administrators' process; they will determine the timescales and they will determine the process that people will have to follow.

  178. Could you hazard a guess, or an assessment?
  (Mr Bowker) I do not believe I could, no.

Chris Grayling

  179. You say that you are funding the bid team but also you are negotiating with the bid team; now that is a very odd position. What is the legal basis for the SRA actually being the provider of costs to a bid team, in this?
  (Mr Bowker) Government took the decision, to say that it would be wrong not to have at least one bid; it is for the administrators to run the process, and they will call for bids in due course. But the Government felt it was appropriate to have at least one bid; that is the CLG bid team. And the mechanism basically is channelling funding through the SRA to ensure that that can be done. But basically it is one clerk who manages that process; and it is an entirely mechanistic thing, there is no negotiation, there is no process involved, other than a funding route.


 
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