Q41 Greg Clark: You are currently re-forecasting the passenger forecasts, as I understand it. Who is carrying out that forecast?
Mr Holden: This is the commercial team within the Eurostar business.
Q42 Greg Clark: Have they contracted any consultants to help with that?
Mr Holden: They do contract consultants and they do undertake various market research analyses.
Q43 Greg Clark: Do you know which firm is doing the forecast?
Mr Holden: I do not know which firm at this particular point is doing the work. I know that in the past LEK have undertaken the work, and Booz Allen have undertaken the work for the Department for Transport.
Q44 Greg Clark: According to the Report, Booz Allen conducted the work in both 2001 and in 2004, in terms of the projections. Was it sensible to employ the same firm to project into the future since they got it so disastrously wrong in 2001?
Mr Holden: There is a balance to be taken between bringing in new people who have very limited knowledge of the business, and people who do. That judgment has to be made every time a decision is made.
Q45 Greg Clark: The consequences of the over-estimation in 2001 were pretty catastrophic. It was not the consultants' fault, then, that they made that mistake?
Mr Holden: I do not believe it has been catastrophic because there have been a number of other things that have happened since those estimates were made, which have kept the economics of the project very much the same today as they were in 2001, at the time of the first NAO Report.
Q46 Greg Clark: Just in terms of the forecast revenues, if it was not the fault of the consultants, was it the fault of the Department? Who misperceived the-
Mr Rowlands: I think Booz Allen were forecasting for the Department not for LCR.
Q47 Greg Clark: I am sorry, the question should be put to you, Mr Rowlands.
Mr Rowlands: It is certainly the case that the forecasts substantially over-estimated the position today. I think it is the case that even when Booz Allen did the 2001 forecast, which they actually did in 2000, they, and frankly nobody else, really quite figured out the stunning success of the low-cost airlines. The low-cost airlines did not exist when this project was put together.
Q48 Greg Clark: They did not exist in 2000?
Mr Rowlands: Not with the sort of success that you have seen in 2005 with an ever-growing range of low-cost destinations; nor could they foresee 9/11 and the impact that that would have.
Q49 Greg Clark: This is a firm of strategy consultants who have a feel for the developing trends in the sector, and you are saying that five years ago they had no inkling that low-cost air travel was likely to increase.
Mr Rowlands: No, I did not say that. I think I said that they, and nobody else, quite estimated the stunning success of the low-cost airlines. What it does tell you, and a warning for the future-and again the NAO has drawn it out-is the difficulty of accurately forecasting revenues and ridership on very novel major projects. This after all was the only high-speed railway in the country, and the first new railway line for a hundred years. Looking back, a lesson that we will want to draw out is that the next time we look at anything like this we will want to look a great deal more severely at the downside.
Q50 Greg Clark: Presumably you are doing that now. Is Booz Allen conducting the current review?
Mr Rowlands: I believe they are.