Examination of Witnesses (Questions 500
WEDNESDAY 31 OCTOBER 2001
500. Mr Green, would you like to give us your
view on the matter?
(Mr Green) He is the right man for the job at the
time. He has been forbidden to deal with any Virgin activities
for the next 18 months is my understanding, and I believe his
personal integrity is beyond doubt in doing that.
Mrs Ellman: Could I ask Mr Garnett to respond.
501. Mr Garnett, Do you have a different view
(Mr Garnett) I think that he is straight. I am clearly
concerned that he has no role whatsoever in any negotiation relating
to Virgin's settlement of its argument on West Coast given there
could be implications on to the East Coast, and that needs to
be totally divorced.
502. Have you made that clear to the Secretary
(Mr Garnett) Not at this stage. It has only recently
come up within the last 24 hours.
503. Did you not make that clear at the time?
(Mr Green) Instructions have already been issued,
504. Mr Green, are you seeking compensation
for Railtrack's failure to modernise the West Coast Main Line
(Mr Green) If we do not get phase two of the West
Coast, which is now in doubt, we would have to have our finances
balanced because we have to keep paying back the premium we promised
in our franchise agreement.
505. Is that a yes or no?
(Mr Green) So we would be seeking compensation for
that loss of money, yes.
506. What sort of amounts are you looking at?
(Mr Green) There are several options. You will gather
there have been debates. What has been said to us is that phase
one is safe so we shall get the 125 mph railway; trains will be
running next spring, and by the latest spring 2003 we will have
achieved stage one. That is the good news. What is not clear now
is how much money is going to be spent on phase two. There are
several options. The worst option is that we would have to be
given about £300 million to balance our books.
507. £300 million?
(Mr Green) Over ten years, so that we could pay back
the billion pound premium which we have committed to pay back
over the ten years.
508. Where are those options being discussed?
(Mr Green) I think they are renewals and signalling.
This is Railtrack's area for questioning because we simply buy
access to the track. Our understanding is it is on signal renewals.
509. What kind of communication is there between
Railtrack as it is running now and yourselves?
(Mr Green) At the moment there is a very detailed
series of discussions going on between ourselves and Railtrack
and the Strategic Rail Authority and Government. That will become
public in front of the Regulator at some stage.
510. Is there any form of consultation with
anybody outside those parties?
(Mr Green) The Regulator will be the form of consultation
to which all users, as GNER, can come and learn the facts and
state their views.
511. Do you have any links with regional development
agencies or regional assemblies looking at the regional implications
of failure to modernise?
(Mr Green) Yes. I have been very closely involved
with the Welsh and Scottish Assemblies.
512. What about the North West?
(Mr Green) Not enough.
513. Have you had any links with the North West?
(Mr Green) Yes, but not recently.
514. And do you intend to have them?
(Mr Green) I am happy to come and get closer on this
one because it is a huge issue for the North West.
515. Do you not feel it is grossly unfair for
the public to suffer because they have been let down by Railtrack
and then to be expected to pay out again in compensation to you
as a private company?
(Mr Green) It is hugely sad that we may not finish
phase two in 2005. It is still "may not", nothing has
been decided yet. At the end of the day somebody has got to spend
a lot of money to finish phase two.
516. How much money?
(Mr Green) No-one knows the final number but it is
more than £6.3 billion.
517. Can you give us any better indication than
(Mr Green) No more than the numbers you heard at the
beginning of the Committee. One hears rumours that it is as high
518. When do you expect that you and the public
will know what is happening, will it be after the event?
(Mr Green) I think we are talking weeks and perhaps
a month but no longer because the issues are so important and
contracts are not being let and the work will slow down.
519. Would you say there is sufficient consultation
with public representatives on matters as important as this?
(Mr Green) These are huge private contracts, that
is the first problem, and large sums of monies are swinging around
here, so you would expect the private people involved to be looking
at their facts very carefully. The SRA and the Regulator are the
people who make it public.