 sut mae'r cwmaintio ar y cwmaintio ar goddig ddau cwmaintio ardal i'ch gael y cymdeithas diwylliant i gymhwyntio cyngor. Rwy'n gwneud i'r cwmaintio ar gyfer y gfer'u ddweud gymaen nhw eich gydag ei gwwysig i'r clif lwg i'n gwirioneddol pwysydd eich cymdeithas diwylliannol yn ein gweithredu gyda Gael Ross i Roder-Grant. Mae'r ddweud gweithg etoedd i'r Gwmaintio ar gyfer y cymdeithas... The committee has asked to consider its approach to the scrutiny of the island Scotland bill, which is a gender item 3. The question is, is the committee happy to take this in private? Yes. We are all agreed. Moving straight on to a gender item 2, we are going to receive an update from ScotRail Alliance and Night Work Rail on rail services and the rail network in Scotland. Today I would like to welcome Mark Khan, the Chief Executive for Network Rail, Alex Hines, the new managing director of ScotRail Alliance and David Dixon, the infrastructure director of ScotRail Alliance. The committee last heard from ScotRail Alliance on the 18th of January, when Mr Hines predecessor Phil Verster updated the committee on a number of rail projects and improvements. I would like to invite Mike Khan and Alex Hines to make a short opening statement. Mark, if you would like to lead off. Thank you, convener, and good morning, everybody. It is a great pleasure for me, as Chief Executive of Network Rail, to have an opportunity to be here with the committee. I come here for three main reasons. Firstly, to talk about the ScotRail Alliance, my observations on this groundbreaking partnership, two years in to the partnership. To introduce Alex Hines, the new alliance managing director, who joined us less than two weeks ago, to continue the excellent work that Phil Verster led forming the alliance and helping its initial creation. But also to talk to you about the exciting plans for upgrading Scotland's railway, adding 20 per cent more capacity to the railway, 100,000 more seats in the next couple of years, really transforming Scotland's railways for our passengers. I fundamentally believe that railways are best run when track and train work closely together with alignment of objectives, alignment of incentives based on delighting passengers. That is why within Network Rail we have driven devolution to local businesses that in turn work as closely as possible with train operators. That is why I have devolved decision making for Scotland's railway to the team based here in Scotland. This devolution within Network Rail is leading to different forms of alliance, formal and informal, in different parts of the country. That is driving innovation and faster decision making. But here in Scotland the ScotRail alliance is more ambitious and more integrated than anywhere else in the country. Nowhere else in the country has one person like Alex who is personally accountable for the total performance of the whole railway. It is, of course, helped by the fact that in Scotland we have a separate regulatory settlement for the railway infrastructure and its own funding. Operational targets for the railway are set and all investment priorities are set by Scottish Government. Given that, I am in no doubt that we are accountable to the Scottish people for the success of their railway. Alex, David and I being here today is an important part of this accountability. I firmly believe that the ScotRail alliance is the right model for Scotland. It is allowing us to deliver one of the biggest upgrades of the railway since Victorian times and delivering improving performance every single day on a railway that has never been so busy. I can tell you that there is huge interest in the rest of Britain in the alliance here in Scotland. With every part of the country keen to learn from what is happening here, I think that Scotland is currently leading the way in how we can improve collaboration and focus on passengers. I mentioned that we are delivering the biggest railway upgrade for generations. Network Rail has a fine track record of project delivery in Scotland over the last 10 years, improving your railways and building new railways, reconnecting communities to each other and to jobs, housing and thus economic growth. The new borders railway was delivered on time and within budget, and we have had other notable successes with Airdrie Bathgate, Glasgow to Cormannock route upgrade, Paisley Corridor route upgrade, Paisley Canal electrification and many others. Those projects really matter. The upgrades that we are now delivering and the new trains that they will enable will mean an increase of 100,000 seats every weekday by 2019. It is a transformation of the railway, but one particularly challenging project has been and still is the massive Edinburgh Glasgow improvement project or Egypt. As you know, this is far more than just an electrification programme but a comprehensive route upgrade. Whilst there have been a number of really significant successes within the project, including the groundbreaking work on Queen Street Tunnel and Winchborough Tunnel, we have also faced some significant challenges. However, I can assure you that the team-based here in Scotland are working absolutely flat out. As we sit here today, I can confirm to you that what the minister said and his letter to you yesterday is that we are on track to deliver what really matters to passengers, which is a railway that is able to deliver the improved December 2017 timetable with full electrification and the introduction of the exciting new longer class 385 trains. The railway is a highly complicated engineering marvel with an extraordinarily proud history. As engineers, a railway people can get absorbed in the technical detail. We love it. However, I always remember that we exist for one reason—to improve the quality of life of the people who depend on us, because better railways drive economic growth, create jobs, housing and opportunities. Last year, we enabled 96 million customer journeys, the highest number ever, and we are set to increase that to 125 million by 2025. The railways are the economic arteries for Scotland's economy, bringing people closer to new opportunities across the country, and we never forget who we are ultimately accountable to. Good morning, everybody. I am delighted to introduce myself to the committee as the new managing director of the ScotRail Alliance. As Mark says, a unique and industry-leading partnership between Abellio, ScotRail and Network Rail Scotland. After nearly 20 years in the UK rail industry, the opportunities that lead this Scottish-focused alliance at such an exciting time is one that I couldn't resist. Obviously, for me, it's only day 10, but I am, of course, committed to continuing the practice of regularly appearing in front of the committee to update you on progress and addressing any issues of moment. As well as being a daily ScotRail commuter, I have been lucky enough to undertake lots of mystery shopping in advance of my start, and I've seen much but not all of our great network. Scotland's railway is already something we are all rightly proud of, and it is a great credit to the people who work so hard to make it so, but we know it can be and will be better. My first priority is to review the performance of the alliance, what is working, what isn't working, what needs to change with the overriding objective of delivering for the customers of Scotland's railway, the fair-paying passenger, the taxpayer, train operating companies and, of course, freight operating companies and their customers. We know that 2016 was sometimes a difficult year, so continuing to improve performance and restoring customers' trust in our service is a key and urgent task. Operating a safe, environmentally friendly, punctual and efficient service which delights customers through great people is business as usual for all railway companies, but we are also delivering the Scottish Government's vision for a multi-billion pound investment programme for Scotland's railway. Upgrading old infrastructure often overnight whilst also delivering the essential daily service to customers is not always an easy or elegant task, but it will be worth it. Our objective is a simple one. We are going to give Scotland the best railway it has ever had. We are going to deliver faster journeys. We are going to deliver brand new trains. We are going to deliver more seats and we are going to deliver more services. We are going to recreate a proper high-speed intercity network within Scotland, which connects the seven great cities of our country. We will deliver fantastic stations, smart ticketing and outstanding customer service, helping to drive the prosperity and quality of life for those of us who choose to live and work in Scotland. We will provide improved services for tourists who visit Scotland too. It is a big mission and it is a vitally important one and I look forward to working with you to deliver it. Thank you very much. We are now going to drill down into some of the areas that are concerning the committee. Stuart Scott will start us off. Thank you very much. I start with my usual declarations, convener. I am the honorary president of the Scottish Association of Public Transport and one of a large number of honorary vice presidents of Rail Future UK. I have no executive position in either of these bodies, nonetheless. However, I get consulted about some of the things that they say. I will just look at the numbers. Two minutes ago, the PPM for Scotland was 95 per cent. It is actually a pretty good day on the GB network, it is fair to say. We have seen significant improvements in the PPM in Scotland, but the annual figure is still carrying the overhang of a period of pretty poor performance. Mr Carn, you specifically said that you have a fine-track record of delivery over the last 10 years. We might take the view that it is a wee bit more patchy than that. The Stirling-Alawickin cardinal line came in more than twice the budget. On the other hand, the small project Paisley Canal came in under half for the original budget, so there is good news and there is bad news. However, today's news about Egypt and you have confirmed that we are going to be ready in December 2017, but you would acknowledge that it is now very tight with no margin for further problems. Before I have completed the set of questions, I want to ask to understand what has technically been causing the problems on Egypt, and perhaps you would like to, in obviously layman's terms, explain that. Although I will say that I am a member of the MIET, so you can be a wee bit technical. But not too technical for me. Do you want to lead off with that? Mark or Alex, do you want to start that? I think that David will be able to furnish the committee with the details, but let me just start off at the higher level. I think that we do have a strong track record of delivery. A lot has changed in the way that network rail is structured and formed as a body over the last few years with the reclassification, and that has had a profound impact on not just network rail but the whole regulatory structure and funding structure within the country as a whole. The first couple of years of this control period, particularly in England and Wales, were very traumatic. We had some major problems with bigger projects. It's worth my while coming in, of course, for keeping an eye on what's happening on the Great Western Rail, which is causing for the vital interest we have in getting the rolling stock off to all the interrail. My point really was that the first two years of this control period were very, very challenging as we readjusted to the new set of circumstances as a reclassified body with no increase in debt, limit and so on. After we reset particularly the Great Western programme, for example, I'm proud to say that we've hit every single milestone. Yesterday, I was very proud to be in Paddington when the first IEP train came into Paddington with Her Majesty the Queen on board and saw the refurbished Paddington station. We are delivering now across the board with an improving track record, but projects do face challenges. That's what we are here to do, to recognise those challenges and to address them. I'm not happy with the way the Egypt project has run, the electrification part of it, and we've been dreading into it in some depth to turn it around and to improve it. I'm encouraged by the progress that the team here are making in Scotland to turn that around. David, I'm sure that you can give examples of the kinds of things that are now happening that give us the confidence that we will hit the December date. Can I first hear about what the current problem is? Since the committee last sat and we were there, the date has gone back since then. There were a number of issues that we've experienced in that time. You will be aware that there have been issues around a particular component that has caused problems. What's the component? I don't think we know it. It's a connector for the electrical wires, which effectively attaches it to the structure, and what we were experiencing was that they'd been installed for quite some time, and they were beginning to slip, so effectively failing. That introduces potentially the most significant part as a safety risk, and of course that's of great concern to us. Do you forgive me? Why is this happening? I understand that it's not a new piece of kit. It's a kit that's used elsewhere in the network, so why and what is causing it to happen here? Who carries the can for this? This actual bit of kit that we're talking about specifically here, as far as we understand, is only on Egypt, so it hasn't been used elsewhere, this particular piece of equipment. It's under investigation just now, so as to the exact cause, there's a number of components that have gone off to be independently tested. We'll await what the outcome of that is. The important thing was that we didn't want to wait in terms of waiting for some outcome from that independent testing, so the decision was made that we just need to get on and change these out, and that's what we're doing. So how many are for Marla? There's about 300 of these components, which we have just now built into the programme going forward that we will just take out. We couldn't wait for— And how long does it take to replace each one? They can certainly—a team can do that in a shift. Of course, that doesn't sound like an awful lot. The difficulty with working on night shifts and the amount of work that's going on is, in some areas, you're down to perhaps an hour's access to do work, actual work. Of the 300 shifts between now and October? Yes, because part of what we've done—and it does go back to what were some of the issues—we were running around with about 43 gangs working, typically, of a night across Edinburgh Glasgow upgrade. We've upped that number of gangs now to about 53. That's giving some account for you. There will be leave, there will be reasons why some gangs can't go out, so we'll average just under 50 gangs out of an evening. What we've done is we've built the replacement into the on-going works rather than a specific programme just to go out and change these. Right, but let me go back. I said, how long does it take? You said that you can do one per shift. Is that one per gang per shift? So it's 53 a shift? No, because it depends on where people are working. To be efficient in terms of changing them out, we wanted to build it in amongst the remaining work rather than do a specific programme of just changing out, which would be inefficient for us in terms of trying to build it. So what does the one per shift mean? It means that we will, to this point, in the last couple of weeks, we've changed out—to give you an idea of that, we've changed out about 90 out of the 300. So that's 98 in three weeks, did you say? In less than two weeks. In less than two weeks. So is that a reasonable template for how it might be that you replace the remaining 210? Because they're not universal throughout, there's different types of connectors throughout it, so it depends where they are. So it's not a failure of a single type of connector? Yes, it is, but there's more than one type of connector on the E&G, so they are actually built into the programme. We don't have any concern in terms of actually getting those completed. Sorry, just to be clear, you said there's more than one type, but it's the same. Which is it? There's more than one type of connector on the entire E&G. We're only changing out this one type. That's built into the programme. From that point of view, of our productivity of changing these out, we're not concerned, because it's built within the broader programme of remaining works. Okay, who's going to pay? Well, that's subject to what we actually find us to the cause. At this point, we're not entirely sure of what the cause is. It could be installation, it could be the component, it could be issues with the wire. That's why it's really important that we understand from the testing what the issue actually is. However, as I said, we weren't waiting for that outcome. The important thing was, let's just go on with it. Where does the risk stop? In other words, does that risk get transferred into the Scottish Government's budget, or is that one that you're going to carry in a grail? Okay, you're going to have arguments for your supplies and contractors, I understand that. Where does the money firewall come in? Well, it will depend on what the outcome is. It could end up at an... So depending on what you find in this engineering problem, it could or could not be the Government picking up the tap. Why is that? How would it depend on what the nature of how it came out and just whether we end up having to pay to renew these components or not? At this stage, it's very hard for me to say who would be liable. So even though the Government had no role whatsoever in specifying this failing component, no role in specifying how that component would be installed, no role in hiring the people who were contracted to do it, you're expecting the Government to pay this under some circumstances that you're not today prepared to exclude? Ultimately, Network Rail is funded via Government, so if we ended up with a Network Rail, we're liable, then ultimately the Government would pay for that, but if we find that there's other culpability then it would be dependent upon what that might be, what the outcome would be. But the ownership in Network Rail is UK Government and I'm being quite deliberately parochial. Why should we pick up the tap for something that's entirely your failing or your contractors failing? It's the funding mechanism under which we operate. Well, Mr Khan, do you think that's a satisfactory way of funding operating? Well, clearly the structure of Network Rail is a decision for Government, not for us. We operate within the decisions, within the framework set by Government. What I would say is that clearly we will establish the cause of this failure and if the cause of that failure is the result of failures elsewhere, we will ensure that those liabilities are shifted to those other bodies. Projects have a range of possible outcomes always and when one enters into a project and when you are into a project and decide to procure a project, you know that there are a range of potential outcomes associated with that project and that's the risk that you choose to take as funders when you choose to buy a project. You know that you won't get a very precise number, but there's a range of outcomes that are possible because there's inevitable risk associated with a project. Our job as the delivery agent for you is to try to manage those risks in the best possible way that we can using all of the skills that are available to us across the industry and that's what we're doing. I'm going to move on to other related matters. I'll just make the observation before I do. I spent three years lecturing to postgraduate student project management, so I'm watching with interest. I'm delighted that you move on as long as we stay within Egypt because there are other members that would like to come in on Egypt, so please continue. Indeed, I'm quite content if others want to pursue the passenger's interests, which happens. Continue on Egypt, please, and then we'll bring in the others. I mean, the bottom line, we've heard you say, Mr Khan, that we'll still be going in December on schedule. Now, of course, that depends on ScotRoy at the other half of the Alliance doing certain things. Perhaps Mr Haynes, perhaps new in post, as he may be, can tell us that with the shortened timetable for things like training and so on. Yeah, so you only need three things to operate a train service in the timetable, which essentially is our product. That's some track, some trains and some crew. One of my key priorities between now and the autumn is to make sure that the infrastructure project, the new trains project and the manpower planning within the train operating company come together to deliver a timetable for customers in December. It's not just the infrastructure which needs to occur. The trains are also on the critical path. Actually, we believe that despite delays to the infrastructure, we can compress some of the driver training programmes, which means we can still hit the timetable introduction dates. That is actually one of the benefits of the Alliance, the fact that we've essentially got integrated management. That is something that will receive weekly focus between now and us introducing the electric service with brand new trains. So it's probably my top priority in the job. Well, let me just conclude my section of questioning by moving to the shots and the Stirling, Allwyrd and Blain electrification. Until in particular the Stirling, Allwyrd and Blain one is complete, we can't speed up the services between Edinburgh and Glasgow to the extent that we wish to do so. It's important for passengers and the overall success of the project. How are we placed on that part of the upgrade? We still intend to deliver some journey time benefit for this December. The headline figure of 42 minutes between Edinburgh and Glasgow requires the other elements of the electrification to be delivered and to enable us to retimetable the route and we're working with the project team to make sure that the right elements of SDA, the Stirling and Blain Allwyrd programme are delivered so we can deliver the journey time benefit on Edinburgh Glasgow, which to remind people is a 42 minute journey time on brand new trains which are eight cars long. It's going to transform the customer experience and we're working to deliver that as best we can. So the issues that you've had that have been causing difficulty particularly in the Stirling area, I understand, are now resolved. So the production rates that we're seeing on the Stirling and Blain Allwyrd electrification already far exceed those that we've delivered on Egypt and that's because we've learnt the lessons from Egypt and we're already applying them in real time to the next phases of the electrification programme. Thanks, Camila. Okay, Jamie, you want to come in on Egypt, are you? Yes, on Egypt specifically, good morning panel. I suspect my questions will be geared towards Network Grail in this instance. I can keep them quite short and sweet. You may want to take note of them as I go through. First of all, does Network Grail have any comment to make on the words of the transport minister who yesterday in the Parliament said, and I quote, it is wholly unacceptable that Network Grail continues to say to me that it is unable to deliver the project despite our having provided the funding as the client? That's the first point, the second. Can we deal with that point to start with? Mark, do you want to lead on that? I agree with the minister. I think it's most regrettable that we're having these challenges and these difficulties in the delivery of this project. What I would say, however, is that I'm very pleased that we're in an alliance here in Scotland and that we're working collaboratively and collectively with our train operating partners to ensure that as best as we possibly can, we still achieve the benefits for passengers, which is what this project is really all about. So yes, there are some interim milestones along the way which are moving, and that's regrettable because they will incur some additional cost and difficulty, but we're sticking to our guns to deliver the December 2017 timetable change. Well, you know, sometimes projects don't always work out as planned, and then we take corrective action to make sure that we still deliver the project outcomes, which is what we're doing. So, you know, would we want to start from here? No. Are we fixing the problem? Yes. Okay. So, for the benefit of the committee, given that we have both Network Grail and ScotRail Alliance here, does anyone know the total cost of Egypt? Because I asked the transfer minister yesterday and he was unable to tell me. I'd like to think around the table here today, we have the expertise that someone can flag up to the committee what an earth to total cost this project is going to be. Well, I think that clearly the issues that we're facing in the moment are going to have a cost implication, and there are other, it's a very complicated programme with a number of different elements to it, including the Queen Street station, of course, which is a very exciting development. So, we are constantly reviewing the costs, and some of those costs are commercially in dispute. I mean, so we will have, you know, inevitably have some debate with our contracting alliance partners around where those costs should fall. So, there's some uncertainty around the total cost in that regard. So, I don't want to give a number today. This would be appropriate, I think, to give us a precise number today. But I think when we have greater clarity around the overall programme and the Queen Street programme and so on, then I think it would be entirely appropriate for Alex to update the committee on the total cost picture. Do you have a ballpark or a range? Yeah, but as I said, I think partly because of the commercial complexities here, I think it would be not appropriate to declare it at this point. And on a scale of 1 to 10, how confident are you that we'll have electric trains on the Glasgow Edinburgh line in October? December, pardon me. Well, we will actually have electric trains in October as well, but we are confident about that. But, you know, all projects have risk associated with them. So, am I 90% confident? I think we're very confident. But it's not a cast iron guarantee, and I don't think you'd expect that either, because, you know, events can occur that we will then need to manage. But we have a plan. And I think the good thing I would say is, and I spoke last night, in fact, to the chief executive of the major contractor around this, and I was really encouraged about the difference in approach that we now have on this project. Because one of the things that I think, and I'm sure you find this unacceptable, I certainly find it unacceptable, is that some of the problems that we identified on this project came very late. And, you know, at the last minute, really. And that suggested that some of our project management controls were not as strong as they needed to be within the Alliance. And I was very encouraged last night speaking to the chief executive of the major contractor that our controls are clearly a lot stronger, and that we really do understand what it now takes to deliver this. The improvement in resourcing that we've got is having an impact. So I feel an awful lot more confident about this programme today than I did a month ago. David, before I bring you in, there are actually other questions. I noticed you wanted to come in. Can I just see if I can bring in John at this stage to build on that? Thank you, convener. I'll be very brief in the morning panel. It's a question to you, Mr Hynes. You mentioned training, and clearly there's a pivotal role here for the staff. Now, your predecessor had a somewhat combative style with the trade unions, in my opinion. Can you assure me that you're fully engaged with the unions because they, at the end of the day, are the people who are going to deliver this new service for the public? Yes. First of all, I'm absolutely passionate about workforce involvement, I believe. If you want to create a great company, you have to involve your staff in the running of it, which is something I did a lot of in my previous role. Clearly, our people have their representatives and making sure that we're working in partnership with the recognised trade unions is also very important. One of the things that I will be doing is sitting down with the TUs every six months to explain the business plan, what we're doing, why we're doing it. I've already spoken to one of the full-time officers, and I've got meetings in the diary with the full-time officers of all four trade unions. So, absolutely working in partnership around this change and around this improvement is critical because it's our frontline workforce, the drivers, the guards, the maintainers, the station staff who are the face of our railway. They're delivering the daily service to customers. It's important that they feel listened to, engaged, that we act on their feedback. It's something that I'm absolutely passionate about. Thank you. That's very reassuring. Thank you, Mike. The question that Jamie Greene posed about the funding of this project and comes to the use of the transport minister said in answer to Jamie's question in the chamber that we have a funding ceiling within which we must work. And I do not expect it to be breached. That's what he said. My question is, if we do not know what the funding ceiling is, the minister does not expect it to be breached. I understand commercial confidentiality, and I understand that. If it is breached, he said in answer to Jamie's question that the responsibility for the delivery of the project is network rails and it's the Scottish Government that's the client and the funder. So, if it's breached, who pays? Is it just going back to the Scottish taxpayer to say, we need some more money? Maybe I can make a contrast here between what's happened in England and Wales and what's happening here in Scotland, because there are actually very different circumstances. Here in Scotland, I'm pleased to say that we're in a much healthier position. So, when we have committed to deliver a portfolio of projects over the five-year period, a funding envelope is provided by the government to deliver that portfolio of projects. And what the minister was saying was that despite the challenges that we have with this project, overall we will still be within that funding limit. So, and we have a buffer, if you like, which allows us to manage that portfolio in an appropriate way. That contrasts very starkly to the situation that we found ourselves in England and Wales, where the scale of the ambition in the portfolio and the immaturity of the scope and definition and specification of those projects meant that, as they matured, the cost became much, much higher and it was significantly more than the loan agreement ceiling. And what then that led to was a decision by funding, firstly by government, not to provide more funds. So, the UK government said there are no more funds available. Therefore, we have to make decisions or the government had to make decisions about which programmes to prioritise to live within the means that were available. So, that led to the very high profile decisions around some of the shifting of programmes out of this control period of a couple of years ago. Since then, I'm pleased to say that we are living within the loan limit in England and Wales as well, but it is a constant challenge. It's much tougher than here in Scotland because the buffer is smaller and it's an even bigger programme of work. What you're saying is that you're confident that, in the portfolio that you have got, you will not need to go back to the Scottish taxpayer for more money? I'm very confident of that, actually. I really am. I think that we've got a really good handle on the portfolio projects now. We've delivered some really big successes in this control period already. Yes, we've got some difficulties here and we're all cross about why we are in this situation and we need to address this and we're going to. But within the overall funding limit, we will live within the overall funding limit. Just before we move off on this, I have a question. When we saw Phil Verster and he came into the committee earlier this year and, in fact, last year he indicated that there were some problems on project management where decisions should have been taken earlier and weren't taken timeously to allow the project to develop, which held everything up. Mark, you've indicated to us that you feel that the project management is that much more robust. Alex, you've indicated the same. Can I ask, actually, on the ground, are we actually feeling that the contractors know what they're doing? They can get instant responses because if we're not in that position, they're going to come back to you, presumably Mark, and say, well, you failed to make that decision on time and therefore we want more money. Maybe David, that's an area that you'd like to just clarify. We talked earlier about lessons being learned. I think that the point was raised. The difference even between Egypt and, for instance, SDA in terms of that, the difference in terms of how that's managed, how it's monitored, decision making, the overall governance of all the enhancement programme has moved on significantly as well. Since the EUI report, we now have a different structure in place as well, so we have a project level, which would be E&G, Egypt, electrification, SDE, et cetera, et cetera, which then builds up into programme boards. We have an electrification programme board and the Highland Enhancements, and that feeds up to an overall portfolio. So there's far more governance, far more clarity, and that runs right through with the funder, so TS are involved in all of these forums as well. So the clarity that runs through everything is much greater than it was previously right up through contractors to Network Rail and ScotRail through to TS's funder. A project level, there's far better control in terms of systems, how we're operating. There's a maturity now in having set up alliances, et cetera, some of the systems. We had too many systems running around, so we didn't have clarity across everything that was being monitored and delivered. On SDE, Network Rail have taken complete control of that, so they have single reporting, single tracking, all those sorts of things that we suffered a bit from, regrettably. Earlier on, in terms of the Egypt programme, a lot of these things have been fixed, so there's far greater clarity that allows people to make the decisions that need to do at an earlier stage to make sure that we're more flexible in addressing issues. So there's been a lot of stuff that has been learned from some of the mistakes that we've made earlier on the Egypt project and taken forward to the benefit of others. And if you actually look at the programme going forward, you actually find that we do have, we are working to programme in SDA, we are working to programme in Shots, et cetera, so a lot of the lessons are being learned, but as an outcome we are now seeing, we are delivering to programme. Just so I understand, it appears that the project governance to start with on these projects was poor with Scotland. It wasn't good enough in terms of... As a percentage of the overrun in time and cost, would you put that down to project governance at the start of the project? Just a ballpark figure. It's hard to put a number to... But would you say that it was a good proportion? It's a proportion because of what it feeds into. If you don't have enough visibility, you can't take the actions to address things. So a high level, for instance, on Edinburgh Glasgow, things would look okay, certain delivery rates were fine. What you couldn't identify was that a lot of maybe the easier stuff was being knocked off that would keep rates up, but you couldn't actually see below what the better detail to realise actually in terms of production, we were behind where we needed to be, and so the decisions weren't made then to address that. So you can see now we were at higher levels of gangs, et cetera, that we used to be, and we didn't have that visibility early enough to see that we were dropping back. So it's hard to say specifically... But a good proportion. ... a percentage by good proportion. Okay, thank you. The next question is Richard. Good morning, gentlemen. There were two reviews published in 2015, November 2015, particularly asking questions in regard to the Bay review. Dame Collie argued that the Government needed to clarify the organisational responsibility of the Department of Transport, Network Rail and the Office of Rail and Road, ensure significant more robust programme governance, incorporate the views and needs of end-users, put much more focus on deliverability, including the implications for the supply chain. So what, if any, impact have the recommendations of the Bay report had on Network Rail operations in Scotland? That sounds like you, Mark. Well, absolutely, and I think the Bay review was a really important review because when we were reclassified as a Government body and the whole funding mechanism of Network Rail changed, in a sense, the industry was, if you like, caught out with a huge portfolio of mainly in England and Wales. I mean, the Bay review concentrate on England and Wales, but the lessons apply as much to Scotland as they do to England and Wales. But essentially the industry was caught out with a huge portfolio that was immature, poorly thought through because we relied as an industry on a regulatory structure that allowed Network Rail to manage that risk by borrowing more money off Government balance sheet. Once that avenue of risk management was closed off, suddenly, if you like, all of those projects were exposed for the immaturity that they had. What the Bay review basically said was, and this is a lesson that major infrastructure industries learn many, many times that you need to spend more time upfront specifying exactly what it is you need, thinking through the scope, doing the upfront design, then defining what the contracting structure is, making sure you've got the right cost estimates and so on. Only at that point in time making the final investment decision to proceed with the project. I think that it's just good practice. It's exactly the way that capital intensive industries ought to operate. We have fundamentally changed the way we work in Network Rail, and not just within Network Rail, but with the regulator and with the department, and I believe also here in Scotland, so that we put an awful lot more effort into the upfront design and scope definition before we make promises to passengers, but I do ask as well the politicians to play their part in this as well, because politicians that give indications to the travelling public about the cost of projects when the projects are very immature in their formulation can raise expectations in a very unfair way in my view. So I think we've all got to work closer together to understand the risk of the uncertainty associated with projects and come together and make the investment decision at the right moment in time when we are confident about how it can be delivered and when it can be delivered. I would be very surprised if any politician admitted they were immature. They are not politicians, they are cost estimates. Yeah, I'm quite impressed with the word that you're using, immature, so basically the contracts prior to this immature, weren't they really being thought out? No, it's not that. If I might take some examples, so if you take, I can take a number of examples from around the country, but at the beginning of a five-year control, the way it used to work was at the beginning of the five-year control period, funders would say, I want these projects and we'd say well okay we think that they'll cost roughly this, but we don't know exactly how much. Aberdeen in Venice is a very good case support. Thank you, the first number you thought of double our. So at the very earliest stages of this control period we thought it would cost 171 million, I think it was, but it was, there was no real definition around exactly what that project was going to involve. So now we find, now we've done the work, now we understand exactly what is required, what was going to be needed on the project and we're in a much better position to give a detailed cost estimate and it is higher, but I think that's the right way to approach it, do the work, then allow funders to make the choice whether they now want to buy that product. If they want to buy it, then we'll deliver it with confidence and we've got a very, very good track record of delivering once at the cost that we define when we've reached that level of definition. So you had no longer amateur? When we reach, if you make project deliver, if you look at our portfolio as a whole, the cost of delivering that portfolio as a whole relative to the cost that we estimated at a final investment decision point is about 2% within 2%, it's very close. But it's a bit like saying to somebody, I'd like you to build me a four bedroom house, what's the price? You say, oh, okay. Well, actually I want it in the centre of Edinburgh or I want it in Highlands. The price changes as you define the specifications, so don't you can't create a lump sum price until you've done enough work? Yeah, but if we all, and I'll finish on this, if I want something, I'm getting something done in my house next week. The chap came in, he showed me a plan, he showed me what he's going to do, he gave me a cost. I actually beat him down by a few quid, right? Because I had a figure in my head. So I worked for a bank for 10 years. At the end of the day, basically you negotiate and you decide a price and you don't pay it until it's delivered. And when it's delivered, it has to be the quality that you agreed and the specification, da-da-da-da-da. I now know that you, that's the way you're going down and thank you very much. Yes, absolutely. I'm going to move on to the next question, John. Again, for yourself, Mr Kearney, about another review, the Hindi review. I wonder if you could comment about what the implications of that are for network rail operations in Scotland, please. The Hindi review didn't cover Scotland, so that's the first thing because, as I alluded to earlier on, the major funding problems that we had within network rail occurred in the England and Wales portfolio. So here in Scotland, we knew that we were within our loan agreement and so we didn't have to make significant changes to the portfolio here in Scotland. Whereas in England and Wales, we did not have enough money to deliver all the programmes that the Government wanted, and so decisions had to be taken about which programmes to shift, and that was a decision taken with Government. However, I mean, just as with the Bo review, the Hindi review shone a light on many of the project management or many of the project practices within the industry as a whole, and we've learnt a lot and delivered a lot of improvements. We actually initiated a whole enhancement improvement plan to ensure that we would deliver enhancements better, and those lessons have been applied here in Scotland. I'm confident that, as an organisation, our ability to deliver these sorts of major programmes is better now than it has ever been in the past. As a result of those improvements, there's still more to do, but we are in a better shape because of it. Can I ask—and this was leading on to a further question that I had there—that there was a suggestion that there was an requirement to sell 1.8 billion of non-core assets. This was property spare capacity in your telecom system and indeed depots, and that went in line with an increase in your borrowing limit. Does network rail have any plans to dispose of assets in Scotland? That would be something that we would need to agree with the Scottish Government and the regulator, and there are no specific plans that I'm aware of at the moment to do that. It's a separate conversation that we haven't yet had. Again, the 1.8 billion property sales was to help bridge the gap in the England and Wales portfolio. That was the focus of our efforts. In the very early days, we were looking at our overall property portfolio, and we probably were considering some asset sales within the Scottish portfolio, but I don't think that that is the case now. In connection with the question of disposal of assets, I was going to ask about what the implications of that could be for potentially any future rail enhancements. I asked a parliamentary question recently about that. Can I ask what liaison network rail would have in Scotland regarding that, particularly with local authorities? I know that we've talked a lot about passengers, but the potential to move goods from road to rail could be inhibited if there isn't the potential to maintain some of the lines. That's a really important point, and I'd like to address it on a couple of fronts. Firstly, we can't just sell assets that have a long-term potential future in the railway, so there are regulatory constraints. We have to consult with the industry and consult with the regulator to get the agreement to sell those assets. We have to prove, if you like, that there is no long-term alternative use within the railway, because the last thing that I want to do is to sterilise the growth of the railway, quite the opposite. I want to grow the railway, and indeed that is actually part of the reason why I wanted to sell some of these assets, because the assets that I wanted to sell are, for example, our commercial estate. We have a huge commercial estate of businesses in the railway arches. These are mostly, of course, now restaurants, coffee shops, and all sorts of different kinds of tenants that we have within our estate. I wanted to sell that business, and then reinvest that money in railway projects. We are reinvesting it in projects that will improve the passenger experience. Far from this strategy destroying, if you like, the capability of the railway, it is actually enhancing the capability of the railway by recycling funds into better investments for the railway. Okay. Receipts realise, as a result of the disposal, that they have a UK-wide implication, or is it simply an England and Wales? The major conversations are around England and Wales. It is about how do we address the funding gap within the England and Wales portfolio, and the property sales are focused on the England and Wales portfolio. Okay. Thank you very much indeed. Peter, you have one question next. Yeah, good morning, gentlemen. There seems to be a whole plethora of reviews and reports. We have heard about the Boer Review, the Henry report, but there is another. Transport Scotland commissioned Ernst and Young to undertake a review, which was called the Commercial Assurance Review of the Rail Major Projects Portfolio, a catchy title I have ever heard of. Much of what they reported, we have heard about, already, cost estimates in the development stage have been unreliable, inconsistent Governments between Network Rail and Transport Scotland. When I was particularly interested in it, it says, Transport Scotland lacks commercial leverage to reward or penalise Network Rail to drive performance. That is just one or two of the issues that it highlighted. My particular question is, how has this review influenced the delivery of the on-going Aberdeen Inverness and Highland mainline projects in particular? Alex, do you want to go on or David? The first thing to note is that the recommendations from the EY report are being acted upon. In fact, yesterday I attended the meeting where Network Rail and the Alliance and Transport Scotland get together to review the portfolio of major rail projects. One of the items on the agenda was actually where are we with implementing the recommendations. As I have already said, many of these recommendations have already been implemented and we are generating evidence that shows that they are working. I have confidence that future projects and the rest of the portfolio will go rather better than perhaps Egypt has, which is one reason why we are confident of remaining within our headroom. That is a comfort. We have drilled down pretty severely into the management structure. Basically, you are saying that the procedures now are sufficiently robust to ensure that decision makers have access to accurate information. During the scoping of the project, the development and delivery will take place two times in the budget. Basically, that is what you are telling us now, that the process is now in place and you are confident that it is going forward. We are going to get better at doing what we have not done quite so well in the past. Things have massively improved. In the very meeting that was referred to, as I was talking about earlier, the governance process is much open to all parties, so visibility and ability to make decisions is much enhanced. That is a significant element of what came out of EY. There are further reviews, but getting back to that too early in the process. There are other reviews going on just now. The ORR is looking at the electrification portfolio acknowledging that it looked at it too early and undeveloped to stage, so it is looking at that again as well. There are a few things that tie in with what was in EY that are progressing quite significantly. We are going to go on to the next question, which is about yet another report. John Finch-Everett. Another review, the Shaw review, came up with such stunning comments, as the recommendation was to place the needs of passengers and freight shippers at the heart of rail infrastructure management. I thought that that would have been an assumption. We should focus on the customer. There is a good idea. I understand that Network Rail responded to that with a transformation plan. Is that right? Can you give us any comments as to how, in practice, that makes any difference in Scotland? I think that the really interesting thing about the Shaw review, which I think was a very thoughtful and detailed review, was that it largely supported the transformation programme that Network Rail was on. As I alluded to in my opening remarks, I fundamentally believe that Network Rail has to be closer to customers and the customers are the train operating companies for us, the freight operating companies and ultimately passengers. That is at the heart of our strategy to devolve power to route-based businesses. That was what Nicola Shaw very much supported and agreed with. We now have eight devolved businesses around the UK, around Britain, of which Scotland is one of them. Those different businesses are accountable to delivering for the local customers. We have different alliances in different parts of the country. Different businesses are operating in different kinds of ways to suit the needs of those customers. We are innovating in different kinds of ways to meet the needs of customers. Network Rail used to be very much a sort of command and control central organisation. It is not anymore. It is now very much devolved decision making to the route businesses so that they can work closer with train operating companies so that they can deliver for passengers. There are some really important changes that have occurred in the last couple of years. For example, the train performance targets that Network Rail operates to used to be set by the regulator. Now they are actually agreed with the train operating companies, so are customers. What that does is it means that the train operating company and Network Rail are all pulling in the same direction to achieve the same outcomes. Those outcomes are based on what passengers tell us they really want. We are bringing track and train much closer together to deliver a better service for customers. I am excited about what we are doing here in Scotland because, as I said, we have gone further here in Scotland than anywhere else by having that track and train sort of mantra brought together under the leadership of one person. I accept what we have gone further. You have said before that you see Scotland as an example. In fact, in the transformation plan, it gives ScotRail a case study as an example. Yes, absolutely. And specifically on Egypt, it has, as resulted in reduced costs and helped us to achieve key milestones. Was it a little bit unwise to put that in as an example? With the benefit of hindsight, probably, yes, I would agree with you. I think that we have given that fair coverage, so we will not go on on that one. My final point on this section would be, I mean, there was, I think, suggestions in the short report about somehow bringing in more private finance or other concessions and local sources of funding in financing, that kind of area. Well, so let me talk to you a little bit about what we are doing in Network Rail. Because Network Rail's sort of strategy is based on three really critical ingredients. Firstly, it is about customers. I want the organisation to deeply behave like, if you like, a private sector business, passionate about delivering for customers. And we have talked about that. That is about devolution and alignment of objectives with train operating companies. The second thing is that, if you are a private sector company, you care massively about cost competitiveness. You are constantly saying how can you be more cost competitive to deliver a better and lower cost service. And as a natural monopoly, we have to instill that competitiveness in our company in different kinds of ways. Partly, through devolution, I now have eight different businesses. I can compare and contrast the performance of those different businesses. I can look and see what is working in one bit and say, well, why do not you do it the same way? We start to get innovation and creativity. Can I just ask whether you also compare your costs with the Dutch railways or the German railways? I beg your pardon? Would you also compare your costs with the Dutch or the German railways? Absolutely. Yes. So we also benchmark across the different entities and we benchmark with European railways in a number of different areas. And we perform very well compared to European railways in a number of different areas. We are the safest railway in Europe. We are investing more in our railway than any country in Europe. We are the fastest growing railway in Europe. We have the second lowest subsidy of any railway in Europe. You know, these are remarkable achievements and a testament to the success of Britain's railways that I think we do not often recognise and celebrate enough. But if I may continue, you raised the point about third party funding and finance and that is the third element of our strategy. You see, I believe that railways drive economic growth. They create jobs, they create business opportunities, housing opportunities for people. And I think it's far better that railways, the improvements to railways, are therefore partly funded or even financed by those people who are going to derive economic benefit from the railway. So we're working very closely right across the country to find ways in which third party funding can be provided to the railway by either local transport authorities, local enterprise partnerships or councils, or indeed private enterprises that benefit from improved railway connectivity. So we've got stations that are now paid for by private companies, we've got rail connections to freight terminals that are paid for by private companies, funded by private companies. And I want more of that because why should the taxpayer pay for all of these things if there are private enterprises that directly benefit from it? The more contentious issue is private finance because private finance requires a return on that investment and that's a more challenging set of circumstances actually because they want a higher rate of return than borrowing from government. So they have to demonstrably show that they can perform at a higher level to justify that higher rate of return. And I think we've seen in many places that that is very challenging to achieve actually. Okay, I'll leave that now. Thanks. The next question is, Jamie. Thank you, convener. First of all, I'd like to make an apology to Mr Hines. I didn't congratulate you on your appointment and welcome to your role. I'm sure you will be seeing a lot of you over the years to come. Going back to Network Grill, given that there's been a series of reports, reviews, some on-going reviews taking place at the moment, do you anticipate any structural changes to Network Grill? I appreciate some of this maybe political decisions are made by the Government of the day, but even within the organisation, do you foresee any major structural changes at Network Grill that may affect how it either manages infrastructure projects, delivers them, and any implications that that may have in Scotland? No, I've made the structural changes that I wanted to make in Network Grill and I now have an organisational structure that is really strong and fit for purpose based on, I think, best practice of major infrastructure organisations that I've worked in elsewhere. I think that Scotland gets the best of both worlds now, with the devolved leadership to Scotland, focused on the Scottish priorities, but nevertheless harnessing the purchasing power of a national organisation, the common standards that we can apply across the network as a whole, the lesson learning, the lateral learning and benchmarking across different parts of the railway. Those all deliver real benefits for the Scottish railway, while still allowing decision making to be focused on what you need here in Scotland. I think that the model provides the best of both worlds, and performance is turning around. This is a super tanker. It's a huge, huge industry, and when you change strategy, it takes time to start to really see the benefits deliver. You have to be resolute. You have to be determined to see it out, and I'm really encouraged to see the improvements in performance, not just here in Scotland, but I can point to many other places in the network where those green shoots are really encouraging. Are you going to agree with Mark or are you going to say something different? No, no, I'm going to agree with Mark because for me it's all about devolution and getting on top of the projects, but we quite rightly focus on what's not going to plan, but we must never forget that all the successes that we're delivering. Scotland's railway has happier customers than most of the rest of Britain. Scotland's railway performs at a higher level than most of the rest of Britain. That is something that we should be really proud of, and we've got this multi-billion-pound improvement programme to make it even better. I've got absolute confidence that the issues that we faced last year are now well behind us, and not only are we going to give Scotland the best railway it's ever had, but it's going to be one of the best in the world. That's the level of our ambition, and it's for us to deliver it. Do you want to come back, Jamie? Yeah, I think that that leads quite nicely into my next question. We hear often in committee and in the Scottish Parliament calls for further devolution of Network Rail in Scotland in either partial or completely. In fact, yesterday the transfer minister reiterated his view on this, saying that he, to quote him, it is not acceptable that we as the client fund major projects for which Network Rail, which is responsible for delivery, is not accountable to this Government or this Parliament, and that's something that we hear often from the Scottish Transport Minister. Do you have any personal views on that? Or indeed, could you illustrate why you think that the current situation is the best model? Well, I mean, I'll give you my perspective on it. Firstly, we're absolutely accountable to the Scottish Government in my view. The Scottish Government decides what the priorities are for investment in Scotland. The Scottish Government decides what the performance target should be. The Scottish Government decides what the franchise should be and so on and so on. So I'm afraid, I think we are very accountable to the Scottish Government in that sense. But I do think that the organisation of Network Rail now does, as I said, give you the best of both worlds. It enables us to create something like the ScotRail Alliance. If I didn't have a devolved organisational structure within Network Rail, we could not create the alliance in Scotland. It's because of devolution within Network Rail that we can even have this conversation with Alex. I think that's a really important point. But in terms of devolution, I also think that you need to harness the capacity of a national company for your benefit. I'm very struck that if you take major projects, for example, there's enormous benefit in being part of a major projects portfolio and having the real expertise behind delivering major projects that come from being part of a national portfolio, with real skills and expertise that are applied across that whole portfolio. Here in Scotland, you'll certainly be very familiar with the Lord John Brown, previous chairman and chief executive of BP, who did a big review for government only three or four years ago in the delivery of major projects. One of the things that he said is that all best practice companies that he examined, he said, is very striking that all the organisations that I consulted as part of this review have created central projects authorities to manage the portfolio of major projects to a common set of objective standards and processes. That's what we've done in Network Rail. We manage our project portfolio to a common set of standards, processes and objectives, whilst ensuring that those projects are defined and are then delivered through our devolved organisations. Alex is not catching my eye, so I'm assuming that he's agreeing. Can I, just before I give you a chance to come in, John wants to ask a supplementary to that, so maybe you could tap the two together. Thanks. Well, as someone who supports the devolution of Network Rail and think that it should be entirely in charge of the Scottish Government, you used the term national, I presume you meant UK, Mr County? Yes. I would like to know what the implications for the sleeper and for the rail freight companies are of this one-time referred to as deep alliance. What are the implications for that? Of course, it's not all the train operating companies that operate in Scotland that are part of this alliance. There must be implications for that. There are. Our customers are all the train operating companies and freight operating companies in Scotland. The largest customer of Network Rail in Scotland is ScotRail itself. Abelio, ScotRail and Network Rail Scotland are in a partnership with one another. One of my jobs is not just to run the alliance, but also to make sure that Network Rail Scotland is delivering for its other customers, which by and large it is. No, because there are regulatory protections in place, which means that from timetabling perspective, from the way that we signal trains, the way we grant access to the network, they're all regulated. So all the other train operating companies and freight operating companies in Scotland can sleep easy at night that ScotRail won't get preferential treatment. What it allows us to do is to work more effectively in a more agile way for ScotRail's customers. I'll give you an example. Last week we were discussing our plans for the Edinburgh Festival. This is a global cultural event. It's a biggie for us. We need to get it right. David is part of my team, and we're discussing the management of major stations and track and train and timetable as Team Scotland for the benefit of Scotland's railway. That is a really different place from what exists elsewhere. I think it's really good. I think it's really exciting. My point that I was going to come into, Jamie's question, was my job and the job of my team and I is to focus on delivering for customers within the existing structure. I've been in this industry for 20 years and this structure is always under debate and that will always be the case. We're going to deliver the best railway Scotland has ever had, new trains, faster journeys, more seats, more services. It's going to be transformational for customers and it's really exciting. That is the focus of me and my team. To push the point, has there never been a conflict of interest between that alliance? I take, for instance, during the closure of the Winchborough tunnel and who had priority. If you let me finish the question please and it's directed to Mr Hines, who had priority? Was it the Caledonian Sleeper which was running late or was it a commuter train from Perth? I've got no idea because I wasn't here but if at any point we think a conflict of interest would arise we would take that decision outside the alliance but I would say this is a highly regulated industry and all users of the railway have strong regulatory protections to make sure that everybody gets treated fairly on the network. It's a really important point you're raising here actually and it's because when you in Network Rail as a whole, as we've devolved to eight different businesses, of course the freight community and the national passenger like Cross Country or the Caledonian Sleeper are quite rightly saying well hang on how does that work for us because we run right across the UK network, Britain's network. So that's why we have within Network Rail a function called the system operator which runs across all of the different routes and the system operator has the sort of role of managing the capacity of the network as a whole for long-term investment. How can you best improve the capacity of the network as a whole but also how can we timetable the network as a whole so that we fairly meet the needs of all different users of that network. So how can we best meet the needs of freight trains of directly operated services of sleeper services of alliances and it's very important that that function is outside of the alliance because if it were in the alliance you're quite right there will be other users who would say hang on a minute how can I be sure I'm getting treated fairly that is why it is outside of the alliance. Is that live decision making Mr Cohen? Is that live decision making? No it's not so live decision making around it so which train gets moved at a time of perturbation that is in the hands of the route control teams in a particular route and honestly they sit there and they think about how can we do the most good for passengers. I've watched them do it they look at the train services and they say that train is busier that's a main that's a really busy train full of lots of people let's move the freight train out the way and let it through they're not sitting there thinking about the commercial gaming within within the industry they're thinking about passengers and about how do we restore the service in the best interest of passengers and I think that's where we would all want them to be actually. Can I just take this one step further because what one of the briefings that we that we got as committee was from the officer of rail and road and could you just just because of this timetabling thing one of the questions that came up there there seems to be a dispute between scott rail network rail over the changes to the timetable due to be introduced in december 2017 can you explain why this has now reached a stage where the ORR is considering an appeal I mean you're saying that it works very smoothly but it doesn't appear to have been as smooth as perhaps possible well in in in any organisation or organisations you get tension between the results we're trying to deliver are we trying to deliver faster journey times at the expense of performance are we trying to deliver higher performance at the expense of journey time that's a balance we need to get right and there's trade-offs to be made and and it just so happens that in this case the train operating company and network rail have not yet agreed and they're using these established industry processes to resolve that dispute but these are organisations you get even within within an organisation and this tension between you know the sellers and the marketers who want faster journey times and the production bits of the organisation who want to deliver a really reliable railway and that's a difficult balance to get right and it is a trade-off and we'll resolve it so are you saying to the committee that it's a perfectly natural process and it will be resolved to the to the benefit of all at the end of the day there are established industry processes for dealing with exactly this type of thing so you know a dispute between a train operating company and network rail is not some big disaster it happens regularly and there's there's customer and practice to deal with the issue and resolve it to the satisfaction of of the railway okay ffulton you've got the next question thanks thank you panel for your evidence so far my questions are mainly for a network rail can you say out the key elements of the network rail delivery plan as they apply to the scotland route add i'll just take my second question at the same time how is network rail preparing for the development of control period six which believes to start march 2019 a business plan aspect for scotland particularly in the light of failures in the previous periodic review we're going through the process just now there's two elements one is putting forward what is essentially again a series of developed choices in terms of the enhancement portfolio and that's been developed and is sitting with transport scotland the scotland government to make a decision on on what they would like to proceed with now the timescales on that we'd expect some statement within july in terms of the funds that are available and that kind of high level output statement so i kind of a kind of high level decision on what scotland government would like delivered within control period six so that's that's one element of it in terms of how do we develop the railway so that choice is to be made until we see that in july i think it's mid july ties in across the uk until we see that we won't know exactly what the priorities are for scotland government but there's a number of developed choices i'd say that being put there that have been worked up to a degree to allow that choice to be made in terms of the the rest of our business plan our strategic business plan for for the next control period we're currently going through that we just we're going through the review process just now for the remainder of this control period and through the remainder of the following five years for control period six and that covers all operations maintenance and renewals within scotland again that will be subject to understanding how much funds are available and that will go through a process which takes us through to december of this year and again we've we've put together what we believe we need to do to properly sustain and develop the railway in scotland through that following five years so it will depend on on what funds come through in the process that we go through but that's the two timelines for for july for for that kind of high level output of what scotland government would like to see in in cp6 plus this process for our on-going operation and maintenance and renewal of the network through the next control period okay thanks for that if you can be there i would indulge me i'd just like to also ask about the cutty suck railway bridge replacements which is in my constituency probably also borders on your own john as well i'm happy to take the answer to this after committee but i did want to raise it that the the bridgeworks have been delayed several times or at least twice and i know that the residents in the local areas have been notified of that but i was wondering rather than finding out about it at the same time i'm getting the email and on twitter if i could if the all the elected members could get a more detailed response as to why those delays have been in place rather than just that it's delayed and and so that's it and as i say given the the nature of the committee and the time we're going on i'm happy to take that after committee if you email or yeah i'll like it i can come out with that detail yep make sure that the response is actually sent to the clerk so it can go around all of the committee if that's possible yep i'll do that the next question is john thank you vener i think mr hines i mean we've spent most of our time so far on the network rail side but i'm interested in the you know the natural trains and the staff and all these kind of things which are maybe not spent so much time and i realize you're quite new to this so we look forward to getting to know you better i mean can you just give us your first impressions of scott rail and where do you see what's going to be happening the next year or so what your hopes and plans so i've been really impressed by scott scott rail and scottland's railway in in general i had a bit of time between jobs before arriving and i spent a lot of time travelling on the network as a customer without anyone knowing who i was and you know the frequencies the journey time the quality of the rolling stock the investment programme the the staff the catering you know the first class all of these things benchmark really well against what we see elsewhere in the country last year we had some operational issues which we've now fixed and one of the key things i'll be looking for is can we evidence it through the national rail passenger survey that customers are getting again the service they deserve so we've got a really solid base on which to build but then when we're going to transform the company so i've worked in a number of places where we've introduced new trains and the impact is transformational on customer satisfaction and that's what we're about to do here so we are on the cusp of we've talked today about all the hard work the heavy lifting getting the infrastructure and the trains bill but we're on the cusp of actually delivering the customer benefit and that will you know massively enhance the experience of customers across the scottish network and we're going to do that because we want happy customers and we want more of them we want to drive the patronage of our railway to improve the economics of scott rail as you know we're in receipt of subsidy so the more we can drive that revenue line improve our product actually it gives us funds which we can use to continually invest in the network and one of the things that's really impressed me compared to other places i've worked is you know the scottish government's commitment to a rolling programme of enhancements it's almost you know business as usual and we're already got a list of the projects that we'd like to see delivered in the next control period from 2019 so i'm i'm super impressed it's a great business we're going to make it even better and you know there's a bright future for scott rail and i mean do you ever do you think you're going to anticipate a conflict of interest at all this has been mentioned because i mean i understand that you're paid and appointed by network rail so if there's a dispute like on timetabling how do you personally handle that so you know as at the start of this committee people express their interest so you know if at any point there's a conflict of interest we would have to take the decision making outside of the alliance but you know i'm trusted by a bellio and network rail to be accountable for the delivery of network rails outputs in scotland and the the benefits that are being delivered through the franchise and uh if that was ever in doubt um i would make sure that we never got into that situation so when you're sitting something outside the alliance i mean does that mean that you personally wouldn't be involved and that somebody else in scott rail and somebody else in network rail would kind of end up disputing i mean clearly you know a bellio scott rail is part of the bellio group network rail scotland is part of network rail so one opportunity if a conflict of interest was ever to arise and there hasn't been one yet albeit only 10 days in would be to elevate the decision outside of the alliance so you know these arrangements are not unusual in you know partnerships or joint ventures elsewhere okay thanks i have to ask a question before i pass on to richard lyle did you did you did you go up to wick and thurso no sadly i only made it as far as in venez but i'm going to pass on to richard because i'll get into awful trouble for doing a constituency question but but say you might like to do that richard okay gentlemen what john mason asked actually fits quite nicely into what i'm going to ask scott rail performance as a customer i think your trains are excellent i look forward to going on trains but i want a seat i think you should have i know you'll get many more trains coming or carriages coming you need to improve the number of you know carriages that are on a particular area i want to arrive in time and i don't want a station skipper right a station hop whatever you call it but you've got all these you've got public performance measures cancellation significant lateness period moving annual that's a new one moving annual average scott rail but can i also saying sorry mark you're going to uh not be too too tough when i i say uh would you agree that the network rail was responsible for over half of all scott rail delay minutes during the previous period in last year i'm looking at a particular graph my view is mark you've got the track alex got the trains if he can't use the rail then he can't move his trains yeah can i can i just address that alex i'm sure you want to add this as well because i want to address this point very directly um you use the word responsible actually the the the the correct term is attributed so the delays are attributed to network rail uh as opposed to the train operating company and the reason for that is that all for example all delays associated with bad weather are attributed to network rail all delays associated with trespass people choosing to walk on the railway and stop the trains are attributed to network rail all delays associated with the tragic fatalities when people choose to take their lives on our railways are attributed to network rail so actually the number of delays that are caused by a direct failing of network rails infrastructure are about 20 percent of the total delays now this doesn't mean that we're not that we don't have to do more as a company to reduce the incidents of those other forms of delays because we can reduce the incident of those other delays and if i take fatalities which is really one of the most tragic situations on our railway and that our amazing staff have to have to deal with we've reduced across the the UK as a whole the incident of railway suicides by 16 percent in the last two years against a rising tide of suicides in the country as a whole so so we can we can do things to improve the train performance in those areas where our our influence is um is somewhat more remote and we and we take those very seriously right i take aboard that but the most recent scot rail ppm m a a was 90.3 percent yes just above the level to trigger another improvement plan so what are you both you both going to do to ensure that performance doesn't drop below this level again so on that first if i may i think there is a little bit of understand misunderstanding around um you know the alliance structure so and it's not the case that i've got the trains and mark's got the track i've got the trains and the track so you both play together and we manage it as that okay so in a traditional train operating company structure the managing director of the train operating company would worry about his targets or her targets and delays and network rail would be separate in this structure david is in my team so we manage all the delays to customers irrespective of where they happen because frankly customers don't care what causes delays they just want trains to run on time so i'm pleased to say that the moving annual average we measure trains is performance using an annual average because trains is performance is is seasonal is now at 90.4 we're where we need to be around the improvement plan and in in answer to your question we're going to make it better by having improvement plans which cover all parts of our business so fleet operations stations infrastructure suicide trespass we attack every bit of the pie um you talked about seats so clearly um working with the engineers to make sure we've got the right number of trains each day is a critical task my train home last night normally sits car it was a three you know that ruined my journey home and i personally feel that so not only do we measure their corporate level but we you know the you know essentially our customers requirements are actually quite simple they just want it to work is it clean is it on time and can i have a seat and those things are going to be transformed in the next few months and years so at the moment if you take edinbridge glasgo for example we're operating six car diesel trains they will be eight car brand new electric trains um you talked about skip stopping so um a railway will always use always use skip stopping in order to bring the service back to a timetable otherwise it runs late all day so the question is are we using it in the right places at the right times at the right frequencies and that's about the policies that mark set out which are control centre works too so i agree with you i think the service is excellent and it's going to get better yeah i think it won't i'm i'm the same as you i'm excited about what you're doing but again i'll come back and sorry this is not that's the last question to be there scott rail's right time mma is 8.6 percent below the gb average coming 18th 18th out of 24 operators why is that so one of the reasons for that is the measure which is in the contract which is our focus is around ppm failures so that is our overriding objective from a punctuality perspective so that means trains no later than five minutes and and the train run so that that is our total laser beam focus now where i used to come from uh at northern we focused heavily on on time to great effect and once we've got some confidence around our ability to deliver the the contractual commitment we've made to the scottish government around ppm failures then we can uh see whether we can uh plan and operate the timetable to a higher level of precision this time for the nearest minute but right now it's ppm failures which are our focus because that's what we're contractually obliged to deliver okay now can i thank you and i'll look forward to working with you thank you thank you might you've got a supplementary to that yes i'd like to ask it really it's very interested in mark's response to the question about um delays being attributed to network rail because that's what the transport minister is telling us that that's why he wants to take control if you like of the network rail in scotland because he feels that he can do something about that but what you're saying is actually those are attributed to things like bag weather and other issues so that can't be the reason why he would want to take control of network rails responsibilities in north of the border would it well i i'm clean not not able to speak for the minister i'm just trying to make sure that you understand well that's the point i was asking it um yeah so it is it is it is the it is a difference between attribution and real responsibility and that's what i think um and and there's a reason for it by the way i mean the clear reason why we do we choose to do it this way is because um you wouldn't want the train operating companies as private companies to take those risks on their balance sheet that they can't really manage they can't really manage whether risk and suicide risk and trespass risk so if you ask them to take that risk they'll take it i found that's very helpful but they'll pay for it you'll pay for it that's why it's carried by the national part of the um of the railway i understand that and tell me and that's very helpful for making it making that clear oh my hold on sorry peter wanted to come in very briefly i think and then you're going to get the last question yes i mean a we've heard how you're you're attempting to do the job as well as you possibly can and that's for sure but i'm looking at the front page of the pression journal on monday the june the 12th which is the headline is half of northeast trains running late now that's it's a particularly tough figure because that's within a minute of when they're supposed to arrive so i accept that that's fairly tough but only 50% of trains and dice in veruri and stonhaven were arriving on time in that measure if you take the ppm measure it's obviously a bit better but still they are poor the numbers within ppm at dice are only 88 percent in veruri 87 percent stonhaven 85 percent in Aberdeen only 86.8 percent arriving on time now that is below where we expect to be so i would welcome your comments on how we can improve that that these figures alexa i'm going to allow you a very brief answer if i may because we're trying to look at a global picture rather than to local so so with performance improvement we want there to be a rising tide we need to get better everywhere and we track performance by route and worse performing trains to make sure that we're giving our customers a good service across the network there are some structural reasons why it's difficult to deliver very high levels of punctuality on more remote parts of the network for example single line sections but this is why the improvement programme is so important because we can address some of those inherent characteristics which make running a railway difficult and we can deliver a modern railway rather than a Victorian one i'm going to allow the final question to mike Mr convener i know the committee is interested to find out um this question is about the what proportion of season ticket holders have taken advantage of the free week of travel and um if got real could if you could tell us that so what's the take up being like and also therefore um depending on your answer of course or what are you doing to increase that if it's not the level that we thought it might be so i don't have the latest statistics to hand the uptake has been very good we're we're promoting it across the network on trains and on stations and we're also using it as an opportunity to promote the smart card because we've talked a lot about steel and metal and trains today but actually we're one of the only networks in britain which is going to have its own smart card which is fantastic for customers it means that tickets work through barriers we can start to provide products which are relevant to today's traveling public so for example working mothers who don't work every day they might work three or four times a week we're now providing flexi passes which are delivering you know modern fares and ticketing products for how actually our customers want to use our networks so i'm happy to provide the committee with an update with the latest data after this session that would be great thank you and that would be very helpful could i just say that that concludes our session mark i'd like to thank you for coming up it's been very interesting alex i suspect and david we'll see more of you during the the course of of this parliament but thank you all for giving your evidence to the committee it's been very helpful and i'd now like to briefly suspend the meeting to allow you to leave and move sorry i should say and we are then going to the committee to move into private session