Examination of Witnesses (Questions 200-219)|
WEDNESDAY 19 JUNE 2002
200. Is that one of the things you have high
on your list of priorities?
(Mr Gisby) It is high on the SRA's list and we shall
do as we are told.
201. What difference has it made to the company
being in administration in terms of the capital programme?
(Mr Armitt) I would not say it has made any difference.
202. It has made no difference at all.
(Mr Armitt) No, because we have not been constrained
in carrying out the work which we had in our capital programme
during the period of the administration.
203. So the Government is continuing to fund.
(Mr Armitt) Yes.
204. Can you tell me whether or not the successor
company which has been proposed, Network Rail, is a certain successor
(Mr Armitt) At the moment it is the only option.
205. So there is always a possibility of another
company coming and making a bid.
(Mr Armitt) I observe the process from the outside.
We are very close with Network Rail in its discussions with all
the parties, Railtrack Group, the SRA are involved, the Government
are involved. We are very close to reaching an agreement. I should
be very surprised if at this stage anybody else appeared.
206. Do you think that is ensuring the good
value for public investment?
(Mr Armitt) A decision was made by Ministers to put
Railtrack into administration. We now have to get Railtrack out
of administration. How that is achieved, the method of financing
that, the amount of money which is paid to take Railtrack out
of administration is not a matter for us as the current management
of Railtrack and it is not for us to decide whether the costs
and the value associated with that are bad or indifferent.
207. When do you expect it will come out of
(Mr Armitt) Others have said regularly that the target
is the end of July/early August and that is the earliest which
we could expect to see anything happen. The final approvals which
have to be given are the state aid approvals from Brussels. I
am sure the Department would tell you at the moment that the target
is still early August. Until it happens it has not happened.
208. May I come back to your own direct responsibilities?
Do you feel constrained by a lack of engineering or signalling
(Mr Armitt) At the moment we should like to have more
than the number of engineers we have and we are recruiting more
and we have plans to recruit a couple of hundred more across the
whole of the network.
209. Do you intend therefore to use them directly
or do you intend to continue to use the contractor system? What
are your plans?
(Mr Armitt) I expect us to continue to use contractors
to carry out the physical works on the network. We are in discussion
with contractors and we are reviewing the extent of the inspection,
the decision-making about what should be done, when it should
be done. We intend to take over more responsibility for that from
the contractors. To do that we will need more staff and we will
get some of those staff back from those who are currently working
for the contractors who were "TUPE'd" across to the
contractors at the time of privatisation.
210. Forgive me, I do not want to nit pick,
but there is quite a fundamental difference between taking back
not only large amounts of the work which is at present done by
contractors, but also monitoring the work which continues to be
done by contractors.
(Mr Armitt) Yes.
211. Have you taken a value judgement that in
future Railtrack, or Railtrack's successorI realise you
cannot bind a successor companywill expect to do much more
of the maintenance and upgrade work itself directly or have you
drawn a line between those things which you would expect contractors
to do and if so what have you done it on, what are the bases of
(Mr Armitt) At the moment we do not expect physically
to carry out directly the maintenance or the renewal work on the
212. So you intend to continue with the existing
system but what you are saying to us is that you will bring in
better monitoring and you will also expect to have far more directly
employed engineers who will be able to give an assessment of what
others are doing.
(Mr Armitt) Correct.
213. Is that what you are telling us?
(Mr Armitt) That is exactly what I am telling you.
214. How soon will it be before you are satisfied
that you have sufficient people capable of carrying out that task?
(Mr Armitt) The extent of the task and the degree
to which we rely on external recruitment or because some of those
duties are currently carried out by the contractor and if we were
to carry out those duties we would simply bring those people back
from the contractors, or we would enter into an arrangement with
the contractors whereby we had control of them
215. You see, we are not just interested in
a moving of the pawns around the board, but a very clear demonstration
from you that you have taken this problem on board and understand
that the public are really quite disquieted about this entire
use of contractors still.
(Mr Armitt) We have discussed this at length and our
current view is that it would not be the right decision for Railtrack
to take back and carry out direct maintenance or direct renewal
work with its own directly employed labour force.
216. Because of cost?
(Mr Armitt) It would be a massive upheaval quite frankly.
The skills to carry that work out are fundamentally lying in the
contractor organisations. Therefore we believe that the best thing
to do is to have a range of contractors who make their business
one of carrying out efficient and effective work on the network.
What we want to do is make sure that we have a firm grip of the
engineering decisions, so we will set the standards, we will set
the inspection regime, we will interpret the inspection regime,
we may well carry out more inspection ourselves and we will make
the decisions in clear and simple terms on what gets done and
when it gets done.
217. Without being cruel about your predecessors,
there will be an advance. There have been discussions with several
of our witnesses about the reluctance of Railtrack to come to
any kind of negotiated completion with the Train Operating Companies
or with the PTEs about specific schemes and the West Coast Mainline
is one of them. When do you expect to come to a conclusion on
those particular discussions?
(Mr Armitt) The West Coast Mainline has now had detailed
discussions going on between us, the SRA and the train operators
for several months. The fact that they have been held in the way
they have been held for several months has done nothing but good
for the overall outcome on the West Coast because everybody is
talking in a very open way to one another and the issues are being
addressed in a very constructive way between the parties.
218. Do you think it is going to take a lot
longer to reach some kind of working agreement?
(Mr Armitt) No, I would expect us to be reaching a
conclusion in the next, if I am sensible about this, two to three
219. If you are going to send us a note about
Sheffield and Doncaster and the overruns, what about a note also
about Ashton-under-Lyne and why that is taking so long to negotiate?
On this question of timetabling that you were talking about, we
heard earlier from Mr Green that he thought if there were really
some pushing and banging of heads together at Manchester Piccadilly,
we could get some more capacity out of it without actually making
changes. You get access charges, do you not, for each of the services
which is provided? So you have a vested interest in getting a
bit more capacity through Manchester Piccadilly. When are we going
to get that extra capacity?
(Mr Armitt) We have an interest in getting the maximum
out of the network. We also have an interest in ensuring that
we do not try to stuff too much into the network so that it makes
it that we are less able to run a reliable service and then we
pay penalties when we do not run a reliable service. So on the
one hand we get benefits by receiving access charges. On the other
hand, to the extent that we then have a congested network, which
we cannot run reliably, we pay penalties. So we seek a balance.