This Page was Last Updated on 29th
January 2010
Rule, clause or Condition |
Determination |
Date of Hearing |
Points made within Determination (Verbatim
extracts given in Italics, or between “quotes”)
|
|
38.1 |
ADP35,36 and 38 |
September 2009 |
“
17.
The provisions of RISAC, which have
remained largely unaltered since initial publication in 1996, prescribe the
processes that Network Rail and the relevant POs should follow to promote
and/or protect their respective rights and commercial interests. As such 17.1.
they are processes that are effective
only in proportion to the diligence with which each party fulfils its own
obligations, and verifies that the other has duly done the same; 17.2.
they are processes requiring annual
re-cycling, perhaps in recognition that some initial headline allocations of
costs between parties owed more to expediency than to sound accounting and
arithmetic, and were thus only estimated approximations; 17.3.
they reasonably contemplate that the
level of understanding of station activity, and the accuracy of accounting
for that activity would evolve to meet the progressively more sophisticated
needs of the privatised railway; 17.4.
whilst they do not preclude “broad brush”
agreement at the headline level in relation to the preparation of a “best
estimate” of Total Variable Charge, there is no implied provision for such a
broad brush approach to specifications of functions, or accounting for actual
expenditure, or for such an approach to pre-empt any findings as a result of
Inspections; 17.5.
they do not lay down any benchmarks in
respect of the proportions of any head of expenditure that should be
allocated to either Qualifying Expenditure or non-QX; 17.6.
they do provide mechanisms by which,
where parties are not agreed upon the specifics in relation to apportionment
between QX and non-QX, they may have recourse to appropriate dispute
resolution. 18.
The decisions by the First Group TOCs and
the Govia TOCs each to invoke the right to inspection accorded by RISAC 38.1
appear to have revealed that the provisions of RISAC have not been observed
in detail in significant areas. In
particular, 18.1.
where there have been custom and practice
allocations between QX and non-QX, no documentation justifying those
allocations has been preserved by Network Rail; nor was any evidence brought forward, by any party, as to
previous attempts to test their appropriateness; 18.2. the
accounting practices used have not been immune from error, and would appear
to have allowed scope for substantial misallocations of expenditure (the
Panel was advised of discrepancies thus far totalling £170,000). ” [ADP35,36and
38] |