Examination of Witness (Questions 280
WEDNESDAY 12 JULY 2000
MR T WINSOR
280. If you got agreement, when would they start?
(Mr Winsor) First of April 2001. I think I mentioned
earlier that I am also establishing an asset register in relation
to the capability, capacity and
281. You are establishing it?
(Mr Winsor) Yes. Sorry, I am requiring Railtrack to
establish this asset register.
282. Are you giving them a timetable?
(Mr Winsor) Yes.
283. Is it a nice short timetable?
(Mr Winsor) I have to agree the timetable with them
and if they refuse to agree to a timetable with which I am satisfied,
then I shall obtain the timetable using compulsory means.
284. Do you have access to that or will you?
(Mr Winsor) If I may put it this way, virtually everybody
but a train spotter is going to have access to this database once
it is established. It is going to be available to Railtrack itself,
its contractors, its prospective contractors, rolling stock manufacturers,
consultants, train operators, regulatory authorities, just about
everybody who has a legitimate public interest in it.
285. That includes us of course. Remember us.
(Mr Winsor) I expect, as a regulatory authority of
a kind, perhaps of the supreme kind, that you will have access
to it as well.
Chairman: I like that rapid recovery. I can
see you are going to do well.
286. May I start with the West Coast Main Line?
Given the recent announcement by Virgin Trains that they are considering
taking court action against Railtrack, are you satisfied that
Railtrack will meet its obligations on the West Coast Main Line
improvements to Virgin and to other users?
(Mr Winsor) No.
287. Would you care to elaborate the reasons
why you have come to that conclusion?
(Mr Winsor) The West Coast Main Line upgrade is a
project which has been in quite considerable difficulty, some
trouble. Railtrack has pretty much lost two years and is now trying
very hard and running very fast in order to catch up the lost
time. I believe that it will catch up the lost time in relation
to phase one, which contemplates 125mph operation by May 2002.
However, Railtrack has published in its annual report, that it
may regard phase two of the project, which is 140mph operation
by May 2005, as not the right solution for the industry and therefore
they may seek to renegotiate the deal with Virgin. Virgin has
an existing deal and Virgin expects the contract it has to be
honoured in full by Railtrack and indeed that is what this morning's
288. I should like to ask you a question about
phase two, if I might, because we are advised that the modernisation
project has risen in cost from £2.3 billion to £5.85
billion. In evidence to us Gerald Corbett said that the main reason
for that was the decision by Railtrack to move away from the moving
block signalling and to go to another system which was more expensive.
Given that is phase two, given that clearly if those additional
costs are anything like accurate, presumably that could have some
effect on your deliberation for access charges.
(Mr Winsor) Yes; it is going to.
289. I am glad you confirmed that. That being
the case, were you consulted or were you advised in any way, shape
or form, about this decision which Railtrack took that has, according
to Gerald Corbett, accounted for the majority of the increase
in the costs?
(Mr Winsor) Yes.
290. You were. Did you approve it?
(Mr Winsor) No, I did not require to approve it. They
informed me that they had made a decision, that the moving block
signalling system was a technology too far and it was far safer
to go for conventional signalling. This was going to increase
the costs very substantially. They told us it would increase the
costs from £2.2 to £5.85 billion. That is not a decision
for them to make.
291. So you were effectively told that they
had taken this decision.
(Mr Winsor) I was told they had taken the decision
to change the technology. I was told what they thought the costs
of that change would be.
292. That is fine.
(Mr Winsor) The decision as to what the costs of that
change will be is mine.
293. I understand that. Nevertheless, you will
appreciate that Members have to take evidence on its face value
and this is the evidence we have had from Railtrack, so I need
to pursue this a little, if I might?
(Mr Winsor) Yes.
294. You were told about it. It is not for you
to approve or otherwise. Did you comment on it?
(Mr Winsor) Yes.
295. Are you able to advise the Committee what
those comments were?
(Mr Winsor) I thought it was a remarkable increase
in the costs and that we would be looking at the costs extremely
carefully. For the last several months we have been subjecting
Railtrack's projected costs to very detailed and thorough scrutiny.
I announced provisional conclusions in relation to the maintenance
and renewal element of the West Coast Main Line on 20 June 2000
and I shall announce my conclusions in relation to the enhancements
at the end of this month.
296. Do you think it is satisfactory that significant
decisions were taken by Railtrack in particular which have a dramatic
effect on the costs of particularly large-scale projects which
could flow through into access charges or other chargesit
could be on the public pursewithout your office having
some say in whether or not those projects, as they are put by
Railtrack, are in fact the right thing to do?
(Mr Winsor) I do have a say, because Railtrack under
Condition 7 of its network licence is obliged to enhance the network
in accordance with best practice in a timely, efficient and economical
manner. If I believe that Railtrack are not doing that then I
can require them to stop and take a different course of action.
297. May I now move to the comment you made
about access charges when you finally reach your determinations
and set them? I think I paraphrase only slightly that you said
that once you have done that it is up to the Strategic Rail Authority
to buy into the system based on those charges. What do you mean
(Mr Winsor) I think I said it is up to the Strategic
Rail Authority to decide what they want to buy. The process of
the periodic review is that I have to assess what it will cost
Railtrack to maintain and renew the network in the next five years.
The Franchising Director entered into a number of contracts in
1995-96-97, which obliged him to pay whatever I decide the costs
of maintenance and renewal of the network will be at the next
periodic review. However, in relation to enhancements of the networkand
a lot of discussion has taken place this afternoon about new capacity
and whether there is going to be enough for freight and questions
of that kindit is a matter for the Strategic Rail Authority
to decide whether they regard the prices . . . Railtrack will
set out a menu, we shall check that everything which ought to
be on the menu is on the menu, I shall attach prices to it and
Sir Alastair Morton and Mr Grant will decide what they want to
buy. That is in relation to enhancements.
298. That is very concise and helpful. When
you are setting your access chargesand I fully appreciate
your initial statementgiven that it is now apparently accepted
that investment in our railways will come from a number of sources,
Railtrack, the private sector, access charges and public money,
do you accept that there will be a need for significant amounts
of public money in these investment plans? If that is the case,
do you take that into account when you are considering your access
(Mr Winsor) I do agree that there will be a need for
significant amounts of public money and we are going to hear quite
shortly how much money the Government are going to decide is going
to be provided. That is especially true for freight because the
economics of freight are very different from the economics of
passenger services. The Strategic Rail Authority will have to
decide how much of the public money they have in their bank account
they are prepared to use in order to fund new capacity for freight.
That is a decision for them because it is a strategic decision
and that is what they do. They are the buyers of services, they
are the users of public money, they make those key decisions,
that is once I have worked out how much a fair and efficient,
a competent infrastructure operator would charge for that capacity.
299. I think you have said in answer to my question
no, you do not take any involvement of public money in your considerations.
(Mr Winsor) I think you are right.