On Tuesday 29 April the Committee asked for a note from the Promoter explaining clauses 40 and 41 of the Bill.

Clause 40 is based on a provision contained in the Channel Tunnel Rail Link Act 1996, and deals with co-operation between the controllers of railway assets with which Crossrail construction, maintenance or operation interact and the Nominated Undertaker. Either party can require the other party to enter into an agreement. The object is to ensure that neither the Nominated Undertaker nor the controller can act unreasonably in dealing with a problem relating to the interaction of the Crossrail works with overland or underground railway assets.

If the parties cannot reach agreement under clause 40, the matter is referred to arbitration. The Secretary of State may then, under clause 41(3), specify the results to be achieved by arbitration, and then the arbitrator determines the fair terms—such as compensation—by which those results are achieved. This is to avoid the possibility that the result of the arbitration frustrates the ability of the Nominated Undertaker to deliver essential Crossrail works, which have been authorised by Parliament.

The asset controllers in question include London Underground and the Public Private Partnerships, BAA, and Network Rail. Clauses 40 and 41 are only intended to be used in circumstances where the matter is not within the Office of Rail Regulation's normal jurisdiction, or a solution cannot be reached by normal agreement.

It follows, therefore, that the Promoter does not intend that clauses 40 and 41 will apply to railway operators on the Network Rail network, as clause 40 should not supplant or override the allocation of access rights under the Railways Act 1993, the taking of possessions under the Network Code as overseen by the ORR, nor, indeed, the Department's stated intention to work within normal industry processes as far as possible in connection with the Crossrail project. If clause 40 is not applied in circumstances where the matter may be referred to the ORR for determination in accordance with its statutory duties or functions, then clause 41 does not apply in these circumstances either.

Indeed, it is unclear how these clauses could be used to supplant or override the ORR's decisions under the Railways Act 1993 with regard to access rights, as the provisions that would have allowed intervention in the allocation of access rights are intended to be removed in accordance with the Minister's recent statements (made on 11 and 18 April) and clauses 40 and 41 do not directly empower the Secretary of State in making a direction to modify any access arrangements directed by the ORR under the Railways Act 1993. It would therefore be an abuse of power, and thus judicially reviewable, for the Secretary of State to use clause 41(3) to seek to modify any decisions made by the ORR under the access regime of the Railways Act 1993.

Whilst, therefore, clause 41(3) is not to be used to direct the ORR in discharging its statutory duties or functions, there are other circumstances where clauses 40 and 41 might apply. For example, the Crossrail works at Farringdon station will involve a complex interface with other works, such as Thameslink, and non-regulated asset controllers, such as London Underground. It is therefore recognised that this complexity requires managing in order to ensure the successful delivery of the Crossrail project at this location, particularly as it may be necessary for the Secretary of State to ensure that the terms of a London Underground or PPP contract (which is not regulated by the Railways Act 1993 or within the ORR's jurisdiction) do not unreasonably prevent something that is critical to the delivery of the Crossrail project that has been defined as part of the Bill process.

Nevertheless, clauses 40 and 41 remain fall-back provisions in these circumstances, as it is also recognised that, in this example, London Underground, as a key delivery partner to the project, will have a direct interest in integrating Crossrail works successfully with its own existing assets.

The Promoter is considering whether it is appropriate to, during later stages of the Bill process, make it explicit that clauses 40 or 41 should not be invoked by either party where the matter may be referred to the ORR for determination in accordance with its statutory duties or functions—in effect, where a solution can be reached under the aegis of the normal regulatory processes.

Notwithstanding that, the Promoter is clear that it does not intend that clauses 40 and 41 will apply to railway operators on the Network Rail network. The provisions would instead remain in reserve to deal with such complex circumstances as outlined above, although the Promoter will specifically review clause 41(3) following comments that the Select Committee has made.