Examination of Witnesses (Questions 413
WEDNESDAY 15 NOVEMBER 2000
413. Gentlemen, I apologise for keeping you
waiting. Thank you for coming this afternoon. Would you be kind
enough to identify yourselves?
(Mr Brown) Yes, Madam Chairman. I am Richard Brown.
I have just taken over as Chairman of the Association of Train
Operators. I am also Commercial Director of the National Express
group. On my right is George Muir who is Director General of the
Association, and on my left is Keith Ludeman, who is Chief Executive
of Rail for the Go Ahead group.
414. Did you want to say anything in general,
(Mr Brown) Just very briefly. First of all, thank
you for this further opportunity to give evidence to your inquiry
into rail investment. I guess it is important to remind ourselves
that an awful lot of has happened since we last attended. The
10 year transport plan we have warmly welcomed. We do believe
it provides a good foundation for going forward and there are
a number of very specific commitments in it backing the vision
which has been portrayed before. We have also had the Rail Regulator's
final conclusions on his track access charging review, which followed
very extensive and open consultation with the industry, which
we also believe represents very substantial progress, although
we do have a small number of areas of continuing concern, which
are well known to the Regulator, that you might wish to question
us on. We also now have the re-franchising process under way.
We asked for longer franchises to provide the basis for sustained
investment in the industry, so we welcome the fact that the strategic
Rail Authority on behalf of the Government is driving this forward.
Two, of course, have now been let to the preferred bidder, Chiltern
and South Central, the latter to Keith Ludeman's company. We also
welcome the flexibility being shown by the SRA in looking at other
than straight replacement franchises like the two year extension
to the Midland Mainline in exchange for a very substantial package
of investment there. Of course, we have had the further tragic
accident at Hatfield, which no doubt you will wish to ask us questions
on as well. We are open to all of your questions.
415. What are you really saying? Are you saying
that the Regulator's review of access charges is a good balance
between Railtrack and the train operating companies, or is not?
(Mr Brown) We are saying in general terms, yes, it
is a good balance, Madam Chairman. There are some areas of concern
which we have.
416. Which are?
(Mr Brown) The area of concern, if I can ask George
Muir to speak about the detail of that?
(Mr Muir) Within the incentives the principal advantage
is an alignment of incentives, but there is some concern that
the penalties, or at least the incentive or bonus for punctuality,
which has in essence been doubled from an average of £30
a minute to £60 a minute, is going to super-charge or very
highly pressurise our decisions relating to performance. There
is a second issue.
417. Before we leave that, Mr Muir, you are
really saying that it is too much to expect the train operating
companies to run their trains on time?
(Mr Muir) No, certainly not. There are many incentives
already on train operators to perform punctually. We have ample
incentive to perform punctually. What we are short of are other
things like reliable trains and reliable systems. We are not short
418. Whose responsibility is it that you are
short of reliable trains, yours or anybody else's?
(Mr Muir) To a substantial extent ourselves and the
trains which we inherited.
419. But the trains you undertook to run when
you took on the franchise. So it was not exactly a surprise to
you, was it?
(Mr Muir) No, it certainly was not.