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

Examination of Witnesses (Questions 80 - 87)




  80. Which is?
  (Mr Blaiklock) That I think that this is a step too far. Most of my comments, I appreciate, have been rather, you might say, against the PPP option in this particular instance. In my business, I am very much in favour of the use of private sector capital to fund infastructure projects, and that is what I have been working on for the last 20-25 years, but I think on this particular occasion, for this particular kind of project, which interfaces with so many other different walks of life and industries and utilities, then this particular PPP proposal is much more complicated than people think. I do not think we should go into it lightly at all.

Andrew Bennett

  81. But it has been very expensive, has it not? We are talking about almost £100m to do the evaluation process. Do you think it is really any better than an informed guess?
  (Mr Blaiklock) I would not want to devalue the work that has been done, but clearly, it is a lot of money to get to where we are today. Put it another way: I have seen, on other occasions, when one is faced with the possibility of doing an infastructure project with private capital, or funding it, you might say, from the Government budget, then actually you ask bidders to bid on two bases: one on the public basis, and one on the private basis. You then actually do get a market feeling for what the public option really will cost. That might have solved some of the problems in this case which, as I understand it, they did not follow this.

  82. Ernst & Young, are you really happy with the work that you have done; proud of it?
  (Mr Middleton) Yes.

  83. Do you think that it was a good process, and that London Underground got good value for money out of the whole process?
  (Mr Middleton) I cannot speak for the whole process. I think our analysis is clear, factual, and sets out what we believe to be the key issues in a consistent and clear way.

  84. But you have identified too many areas, have you not, where it is a matter of opinion, rather than any factual analysis as to which is the right way to go forward?
  (Mr Middleton) I think everyone who has looked at value for money analysis, not just in the context of London Underground/PPP, but in any area, recognises that it is a blend of factual analysis and subjective analysis. We set that out in the report right at the beginning. The NAO recognised that in the work that they have done; London Underground recognise that in their Board report, and actually you recognised it in the report that you recently published, that it was part art, part science.

  Andrew Bennett: Would you like to put a percentage on that? What percentage is science, and what percentage is guesswork?


  85. Informed guesswork.
  (Mr Middleton) No, I would not.

Mr Stevenson

  86. Would Ernst & Young confirm that their company are auditors to Jarvis plc (Tube Lines), and that you are also auditors to Bombardier, Canada (Metronet)?
  (Mr Neal) Yes, we can confirm that.


  87. Do you gentlemen actually know, and I am not sure I am expecting an answer to this, any part of this that has not got some consultant that is not directly involved in some part of some bid of this PPP? Thank you.
  (Mr Blaiklock) I have no association with any of it.

  Chairman: Thank you, Mr Blaiklock. As always, you have been very clear and helpful. Thank you gentlemen.

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