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ANNEX 5 BILL POWERS SIDE LETTER

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					                                                                                  ANNEX 5

                            BILL POWERS SIDE LETTER

1. EWS refers to the letter from Paul Lancaster (DfT Crossrail Bill Manager) to Dave
Ward (network Rail Crossrail Programme Director) dated 12 July 2007 (‘the Bill Powers
Side Letter’) and its appended extract of Section 12 of the Crossrail Supporting
Information Paper (see Annex 4). The comments set out in this Annex should also be
read in conjunction with those EWS has already expressed in paragraphs 26 to 30 of
Annex 4 above.

2. It is of some concern to EWS that the Bill Powers Side Letter is only addressed to
Network Rail. The DfT has actively engaged on the railway powers in the Crossrail Bill
with the Railway Stakeholders’ Forum and the Reference Group through the wider
Crossrail consultation machinery. The concerns of the freight industry are well known to
the DfT through these processes. The DfT’s acknowledgement of these concerns is such
that it subsequently issued an addendum dated 6 June 2006 to the March 2006 DfT
Access Option consultation paper to acknowledge the concerns of the freight industry.
Furthermore, all sectors of the industry, FOCs, Network Rail and TOCs, reiterated their
concerns in their respective petitions to the Government’s Select Committee.

3. Given this, EWS questions DfT’s statement that Network Rail has led the rail industry
in calling for the railway powers the Crossrail Bill contains to be cut back. Concerns have
been universal across all sectors of the rail industry and its supporters that the Bill
powers seek to override the current railway industry legislation which conforms to
relevant EU Directives on fair and non-discriminatory access to the railway network in the
UK. Therefore, EWS is surprised that the DfT did not think to share the Bill Powers Letter
expressly with EWS and all other organisations who had also voiced their concerns over
the railway powers in the Crossrail Bill.

4. Whilst EWS supports and welcomes the DfT’s statement that “it is the Department’s
intention to work within normal industry processes with a view to the Bill powers being cut
back”, this intention is not supported by tangible proposals that give EWS comfort that it
can continue to rely on there being a presumption of fair and non-discriminatory access
to the network in and around London. The qualifications “in so far as possible” and “or
adapt them” imply that DfT is only willing to follow current industry processes up to a
point presumably as long as these procedures lead to a result which meets its aims and
objectives for Crossrail. On the other hand, if normal industry processes act contrary to
Crossrail’s needs and requirements, then EWS assumes that the remaining Bill powers
would then be brought into play to remove any obstacles, which would no doubt include
rail freight.

5. Furthermore, the Bill Powers Side Letter contains no detail on what will actually be
done to give effect to DfT’s high-level aspiration to work within normal industry processes
and so cut back on the Bill powers. It is disappointing that the DfT has not annexed a
draft of the proposed amendments to the Bill that it has in mind. Presumably this is
because should ORR decide through its statutory duties to reject Crossrail’s application,
or significantly curtail its effect on other rail users, then DfT would abandon its intentions
to cut back on the Bill Powers. This assumption is reinforced by the comments in
paragraphs 12.6, 12.8 and 12.11 of the Supporting Information Paper extract which
suggest that the Bill powers may not be removed after all. In the absence of the DfT’s
draft amendments to the Bill powers, it is not possible for industry participants to form a
view as to whether they have comfort on the detailed concerns they raised with the
Crossrail Bill Committee.

6. Paragraphs 12.7 and 12.8 of the Supporting Information Paper suggest that the Bill
powers would be required to be held in reserve, in the event that certain aspects of the


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project cannot be implemented through negotiation. Adopting this approach maintains the
uncertainties and risks for other operators that the TAO was purported to solve. Again the
Supporting Information Paper extract gives no indication of the Bill powers which the
Secretary of State proposes to hold in reserve.

7. Paragraph 12.11 then goes on to say that the railway provisions in the Bill will be
retained to overcome any third party blocking rights under Part G of the Network Code
and to ensure that Crossrail has the same rights as other operators under the relevant
provisions of the Network Code. EWS submits that the Bill powers are not designed nor
intended to give Crossrail the same rights as other operators but rather to ensure
Crossrail is given preference. No other operator has the ability to call upon equivalent
powers to ensure their needs are met when their applications through normal industry
processes have been reasonably modified or rejected.

8. By holding the Bill powers ‘in reserve’, they could be used to hold the industry to
“ransom” if agreement cannot be reached, particularly if the Bill powers are retained in
reserve in their entirety (and the Information Paper is not clear whether this is the case or
not). If this proves to be the case, then the TAO application would be no more than a
facade, as Crossrail would have exactly the same ability to override ORR and other rail
users as it would have had without the TAO. EWS, therefore, strongly resists the
prospect of Bill powers being held ‘in reserve’ for any reason and urges the ORR to
establish what overriding powers will still exist should it grant the TAO before making its
decision.

9. Whilst EWS welcomes DfT’s further intention that any future changes to the
operational pattern of Crossrail would be progressed through normal industry processes,
again such intention does not go far enough as this could be overridden at any time
should the Bill powers be held in reserve.

10. To provide certainty to operators, the Bill powers, which are of concern to the
industry, should be either amended or removed. The industry has previously identified
the relevant Bill powers which are summarised in the attachment to this Annex 5.
Crossrail must make it clear which Bill powers will be removed or reduced before the
TAO application can become meaningful and considered by consultees in full.




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