HC Deb 31 October 2001 vol 373 cc669-74W
Mr. Pickles

To ask the Secretary of State for Transport, local Government and the Regions when he informed the Rail Regulator of his Department's discussions with(a) passenger rail franchisees and (b) train operating companies for taking over responsibility for operating and maintaining railway infrastructure in the areas where they run train services. [9832]

Mr. Spellar

Officials have had meetings on such matters with train operators' representatives or their advisers at their request. These have not resulted in any change in policy about which the Rail Regulator needed to be informed.

Peter Bradley

To ask the Secretary of State for Transport, Local Government and the Regions how much public money was invested in Railtrack in each of the years since privatisation. [10470]

Mr. Jamieson

I refer my hon. Friend to the reply I gave to my hon. Friend the Member for Stroud (Mr. Drew) 18 October 2001,Official Report, column 1315W.

Chris Grayling

To ask the Secretary of State for Transport, Local Government and the Regions how much public money he estimates will be required to meet the 10-year plan's objectives for higher safety; and how this estimate has changed since the plan was published. [10440]

Mr. Jamieson

Transport safety is a major priority for this Government and our L180 billion 10-year-plan will contribute towards delivering a safer transport system. It is not possible to give a precise figure about how much of that money will be required to meet the plan's safety objectives, because much of this expenditure will simultaneously deliver a range of benefits, including safety.

Chris Grayling

To ask the Secretary of State for Transport, Local Government and the Regions how the requirement for public sector investment in rail during the period of the 10-year plan will change as a result of the transfer of Railtrack assets to the proposed successor body. [10401]

Mr. Jamieson

No change is expected.

Mr. Pickles

To ask the Secretary of State for Transport, Local Government and the Regions how many times he has met the Chairman of the Strategic Rail Authority since June; and what the date of their last meeting was. [10443]

Mr. Spellar

The Secretary of State and I have met the Chairman of the Strategic Rail Authority on several occasions—specifically to discuss the Authority's work, as part of wider industry meetings and at the High Level Group for London Rail Projects, which last met on 4 October.

Mrs. Lait

To ask the Secretary of State for Transport, Local Government and the Regions if Railtrack is able to meet the requirements of the Late Payments of Commercial Debts (Interest) Act 1999 in paying its contractors and suppliers. [10448]

Mr. Jamieson

Yes.

Mr. Pickles

To ask the Secretary of State for Transport, Local Government and the Regions, pursuant to his answer of 23 October 2001,Official Report, columns 195–97W, to the hon. Member for Preston (Mr. Hendrick), on the successor to Railtrack, what the credit rating of Railtrack was on 4 October. [10445]

Mr. Spellar

The Standard & Poor's credit rating for Railtrack plc on 4 October 2001, based upon their research dated 2 May 2001, was single A-1 (short term).

The Moody's credit rating for Railtrack plc on 4 October 2001, last updated in June 2001, was A2 (long term) and P-1 (short term).

Mr. Pickles

To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the relationship between the future track access charge regime and the non-profit making status of the successor to Railtrack. [10475]

Mr. Spellar

I refer the hon. Member to the answer given by my right hon. Friend the Secretary of State on Tuesday 23 October 2001,Official Report, columns 195–97W.

Mr. Pickles

To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on his plans for placing responsibility for safety on stakeholder directors of Railtrack. [10285]

Mr. Spellar

I have no such plans.

Mr. Pickles

To ask the Secretary of State for Transport, Local Government and the Regions what arrangements he will make for the financing of the successor body to Railtrack so that it can meet its(a) network maintenance and (b) other obligations. [10532]

Mr. Spellar

I refer the hon. Member to the answer given by my right hon. Friend the Secretary of State to my hon. Friend the Member for Preston (Mr. Hendrick) on 23 October 2001,Official Report, columns 195–97W.

Mr. Gordon Prentice

To ask the Secretary of State for Transport, Local Government and the Regions what steps he is taking to ensure train operating companies maintain the wheels of rolling stock and locomotives to minimise damage to the track. [10393]

Mr. Jamieson

The Health and Safety Executive advise that there are Railway Group Standards governing the maintenance of the wheel profiles of rolling stock and locomotives. The train operating companies have systems in place regularly to monitor wheel profiles. Proper maintenance of the track is also an important issue, and the industry has set up a joint systems authority to develop solutions to the difficulties at the wheel/rail interface.

Mr. Chidgey

To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the impact on the rail manufacturing and renovation industry of the decision to extend existing franchises by two years. [10813]

Mr. Jamieson

The Government's policy is not to treat all franchises alike but to replace them early, or when they expire, or to extend their current term, whichever is most likely to deliver benefits to passengers. The Strategic Rail Authority's Strategic Plan will set out plans for applying this policy franchise by franchise and will thus provide a firmer basis for business planning by the rail manufacturing industry.

Vernon Coaker

To ask the Secretary of State for Transport, Local Government and the Regions what issues he will consider when exercising his powers under schedule 7 to the Railways Act 1993 in approving the transfer of Railtrack plc out of railway administration. [12144]

Mr. Byers

Schedule 7 to the Railways Act 1993 makes provision for a transfer scheme mechanism to be used for the transfer of the undertaking of a protected railway company which is the subject of a railway administration order.

Paragraph 2(2) of schedule 7 provides that a scheme made under that schedule shall not take effect unless (in the case of the undertaking of Railtrack plc) it is approved by the Secretary of State for Transport, Local Government and the Regions.

I will consider carefully all of the terms of any proposed scheme submitted to me by Railtrack plc (acting by its administrators). However, in order to assist potential bidders for the undertaking of Railtrack plc this answer sets out, by way of guidelines, the principal issues upon which I will need to be satisfied before approving a proposed scheme. These guidelines may change from time to time (in which case I will publish the revised guidelines) and they are not intended to be exhaustive and are issued as guidance.

Guidelines

My principal objective, in determining whether or not to approve a proposed transfer scheme, is to ensure that the operation of the network will, after the proposed transfer, be undertaken efficiently, safely and economically.

I also intend to ensure that I am satisfied on the following issues:

1. Efficiency and Viability

The technical expertise of the proposed transferee to operate, maintain, renew and enhance the railway network. This will include: presenting proposals for focused and effective management (particularly in relation to contract management and planning, and a willingness to facilitate enhancement by special purpose vehicles or alternative structures for financing enhancements and developments which separate enhancement and development risk from operation, maintenance and renewal), and demonstrating that employees with appropriate skills will be retained and, where applicable, recruited; A proper understanding of the projected liabilities of the transferee and the performance risks it faces; A proper understanding of Railtrack plc's network operating licence and a demonstrable intention and ability to comply with it; A proper understanding of the Government's strategic plans for the railway industry and a demonstrable commitment to them (including the 10-Year Plan and the SRA's Strategic Agenda); A coherent and cost-effective business plan for: ascertaining the condition of the network assets and life cycle cost minimisation; implementing output based contracts for maintenance and renewal; facilitating the successful implementation of special purpose vehicles (or equivalent arrangements) delivering large scale enhancements and renewals; and the maintenance of an assets register, including a description of process and timetable; Proposals for ascertaining the cost structure of the network business and the control systems to be implemented at both central and regional levels and how successful reporting mechanics are to be achieved; A cohesive, achievable and cost-effective strategy for dealing with those renewals and small enhancements that are not to be delivered by special purpose vehicles (or equivalents).

2. Safety An ability to run the network safely, with a clearly defined safety policy; Evidence that the Heath and Safety Executive has confidence in the proposed transferee and that the relevant Safety Case will be in place immediately following the transfer.

3. Key Relationships Proposals for creating, at regional level, relationships with railway passenger and freight service operators and other stakeholders; Evidence of support from employees and their representatives; Evidence of the confidence of relevant stakeholders in the industry, for instance railway passenger and freight service operators and suppliers of finance.

4. Financial viability and value for money A demonstrated ability to finance the activities of the proposed transferee in a cost-effective manner (including its proposed treatment of existing and future, short and long term finance creditors, and a demonstration that it will have a sufficiently high, investment grade, credit rating to raise the necessary finance for its activities); A coherent plan for the treatment of existing trade and other creditors; A demonstration that its approach would ensure that effective maintenance and renewal takes place at the lowest practical cost. Proposals for the transfer of liabilities which relate to the operation, maintenance, renewal and development of the parts of the network that are to be transferred.

In addition, and to achieve my overall objective, I will have regard to the extent and nature of Government support that will be required to operate the network after the proposed transfer and the value for money that this would represent for Government. I will expect any proposal for a transfer to address very clearly the basis, extent and nature of support that will be required from the Government.

Mr. Redwood

To ask the Secretary of State for Transport, Local Government and the Regions what advice he has received on the strength of balance sheet needed by the new Railtrack company to obtain a BBB credit rating. [11091]

Mr. Byers

As I have stated in an answer to my hon. Friend the Member for Preston (Mr. Hendrick) on 23 October 2001,Official Report, columns 195–97W, it is my firm intention to ensure that our proposal to the administrator would, if accepted, result in the transfer of the business of the company and its finance creditor's indebtedness to a new, financially sound, vehicle and that the debt transferred will have a long-term credit rating of at least BBB/Baa2 and a short-term credit rating of at least A-2/P-2.

In relation to the proposal that we will be putting to the administrator for a company limited by guarantee, we will be targeting a long-term credit rating of A/A2 or higher, to reflect the financing capacity requirements of the rail infrastructure business. I am advised that this would secure a robust balance sheet for the company.

I can also reaffirm my firm intention that our proposal will, taken in the round, preserve the economic rights of the current finance creditors in all material respects. Such proposals must, however, retain the flexibility to translate some of the detailed terms and conditions of the debt into a form that reflects the different structure and credit rating of a company limited by guarantee.

Mr. Rooney

To ask the Secretary of State for Transport, Local Government and the Regions how his Department will provide further financial assistance for Railtrack plc in administration. [12222]

Mr. Byers

Full details of the funding arrangements agreed with the administrators are in the loan agreement. Parliamentary approval for this new expenditure in the form of a voted loan (to be repaid when Railtrack plc moves out of administration) will be sought in a Supplementary Estimate for DTLR. Pending that approval, and further to my answer of 17 October 2001 to my hon. Friend the Member for Scarborough and Whitby (Lawrie Quinn),Official Report, column 1230W, up to an additional £800 million of expenditure has been approved to be met by repayable cash advances from the Contingencies Fund.