Opinion
Delivering the goods
The network shapes up
Funding for infrastructure improvements is a big step in the right direction, says Chris MacRae, even if it does seem to be at odds with other freight policies
n July, the FTA welcomed the government announcement of a £200m investment fund in strategic rail enhance- ments for England and Wales. We are delighted about the boost this will bring to the supply chain and hope, above all, that it will encourage an increase in modal shift. The investment is part of the High Level Output Specification (HLOS) for England and Wales and was announced by the secretary of state for transport for Control Period 5 (CP5), which runs from 2014 to 2019. The fund is intended to further develop the current work on the strategic rail freight network and provide additional investment in schemes such as the ‘electric spine’ corridor of electrification, linking Yorkshire and West Midlands to south coast ports, benefiting freight as well as passenger traffic. This will be accompanied by loading gauge enhancement
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to W12 for 9-foot 6-inch containers. Many shippers require larger containers and the additional height and width is needed if companies are going to be encouraged to make the shift to rail freight. This is also vital for the UK’s position in international trade. With international shipping containers getting taller, having a transport infrastructure that can deal with them is vital to ensuring the UK remains a main port of call for the largest ships from the Asian trades, rather than a feeder destination from the continent, given the pressures on shipping lines to cut down the number of individual port calls within Europe. Creating the right conditions for significant private sector investment in electric freight locomotives, which offer more efficient, capable and sustainable freight haulage, is a stated desired outcome of the HLOS’s focus upon electrification. The HLOS states that ‘the rolling programme of electrification is expected to make rail freight commercially more attractive across England, supporting our growing international trade and transfer of container traffic from road’. FTA wholeheartedly supports the continuing development of Britain’s trade links and connectivity. Mode shift and the environment is a major consideration for FTA and this investment is a great step forward for both. Those wishing to make the shift must make a long-term investment and commitment and this infrastructure investment by the government goes a long way towards encouraging others to do the same, and to leverage in the consequential private sector investment in facilities, locomotives and rolling stock to deliver this. While this infrastructure investment by UK and Scottish governments is welcomed by the FTA, we must stress that the current Office of Rail Regulation freight track access charges consultation, mentioned in this column in August’s
Rail Professional, contradicts this good news. The consultation includes a review of the variable usage charge and proposals to introduce a freight specific charge on the ‘avoidable costs’ of running freight on the network. This represents a potentially fundamental shift in previous track access charging policy away from encouraging freight growth in a context of declining track access charges for freight to help competition with road, to one of maximising the revenue that certain sectors deemed captive to rail can afford to pay.
This sends seriously worrying and negative signals to private sector investment in facilities and equipment for rail freight where pay back periods are far in excess of the five-year control period review timescales. Also, the potential for change in policy mid-way through an asset’s costed life can throw out financial viability calculations. None of this is what business needs if it is to be encouraged to adopt modal shift and leverage in the consequential investment that the government wants to see from the HLOS. It is as though the government is giving with the right hand and the ORR is taking with the left. We are still urging everyone affected to fight these proposals, otherwise this good news may mean nothing and the attractiveness of rail freight will be seriously overshadowed.
Chris MacRae is the rail freight policy manager at the Freight Transport Association.
SEPTEMBER 2012 PAGE 21
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