Rail freight charges ‘disappoint’ industry
by Lorna Slade
The ORR’s decision to increase track access charges has been described as
a ‘heavy blow’ by the Freight Transport Association (FTA) and ‘disappointing’ by the Rail Freight Group.
The ORR says the new package of charges for freight operators to access the rail network, to be introduced from 2016, will better reflect costs and give businesses certainty to plan for the future. The ORR launched a consultation in May 2012 seeking views on charges freight operators must pay to use Britain’s rail network as part of its assessment of what Network Rail must achieve during the five years from 2014 to 2019 (CP5).
The regulator’s analysis highlighted the wider economic and social benefits of moving freight by rail rather than road, but also showed that rail freight traffic creates costs of £280-400 million each year through factors such as wear and tear on tracks. Under the current charging regime, ORR says freight companies pay only a small proportion of those costs, around 21 - 28 per cent, with passengers and taxpayers covering the shortfall. Freight train operators currently pay minimal fixed costs, whereas in 2011-12 passenger train operators paid £887 million in fixed charges to Network Rail. ORR will now:
• set a maximum cap of £1.68 per 1000 gross tonne kilometre on the average variable user charge that freight operators will pay to access the rail network in CP5
• introduce a new freight specific charge, payable for the haulage of coal for the electricity supply industry, spent nuclear fuel and iron ore - all commodities that cannot be easily or economically switched to road
• implement the new charges gradually. The freight specific charge will not be introduced until 2016-17 and then phased in over three years so the full charge will be payable in 2018-19. ORR estimates the average price increases a customer will pay for affected products will be between 3 - 5 per cent.
ORR director of markets and economics, Cathryn Ross, said the charges ‘must better reflect costs, to give our railways a sustainable future’. However the FTA describes the move as a ‘heavy blow for modal shift’ that ‘may halt further rail freight growth’. Freight policy manager, Chris MacRae, commented: ‘This is bad news for rail freight, for British industry and for the environment. At a time when the governments in Westminster and Holyrood
PAGE 12 FEBRUARY 2013
are investing £200 and £30 millions respectively to enhance their rail networks for freight, it is ironic that ORR is pursuing a policy of increasing the costs for freight to use the rail network. This is in contrast to previous policy that had been to reduce these costs - a policy that helped stimulate rail freight growth.’
Liam is top apprentice
Liam Hutchison, 20, has been named Passenger Transport Apprentice of the
Year at the Remit Annual Apprenticeship Awards for his commitment to life on the railways. Hutchison has been with First Great Western in Bristol and South Wales since September 2011 and has now completed his tailor-made customer service apprenticeship. National training provider Remit works with almost 7,000 apprentices across the UK and late last year named just nine young people as its cream of the crop. ‘I have loved my apprenticeship from start to finish,’ said Hutchison. ‘It has given me the opportunity to learn about the rail industry, and the skills I need to progress within the business. I’ve just found out that I’ve been successful in my application for a job as a conductor and I wouldn’t have got there without my apprenticeship.’ Remit’s chief operating officer, Steve
Yardley, said: ‘We had a number of excellent nominations in the passenger transport category but it was Liam’s personality, commitment and dedication that made him stand out.’
ORR calls for greater transparency from industry
Greater transparency in the rail industry - for rail users, taxpayers and rail businesses - will support better customer satisfaction, improved value for money and greater public trust, said Office of Rail Regulation chair, Anna Walker, at a conference late last year. ‘Transparency can help build confidence and trust in the railways in and across the sector,’ said Walker. ‘This
Anna Walker
matters as lack of trust breeds suspicion that passengers are being ‘ripped off’ and taxpayers are not getting value for money.’ Acknowledging that the rail industry has taken ‘huge strides’ in opening up over the past year through publishing more on safety, performance and financial data than ever before, Walker issued a challenge to ‘go even further to sustain this progress and to open up new opportunities for customers and businesses.’
Liam Hutchison with Steve Yardley and special guest Richard Whitehead, 200m Paralympic gold medalist
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