Freight
five-yearly periods can wreck the business case of this investment.
So the process clearly needs to change. There is an argument perhaps for a ten year control period rather than a five yearly one. Also while the regulatory independence from government of ORR is a wonderful thing, when as in this periodic review process it appears to have crossed the line into regulatory arrogance it is very dangerous and without democratic accountability. Until
this Periodic Review the independent economic regulation delivered by ORR unlocked lots of investment for rail freight. This time ORR sets its face against advice from the industry and has damaged confidence in rail freight.
Channel Tunnel freight access charges FTA has (see Delivering the goods July page 43) repeatedly called for Channel Tunnel freight track access charges to come down to facilitate usage of the
tunnel at a scale of traffic that was originally envisaged at its construction. Currently it is under utilised and the significantly higher (than Network Rail’s) access charges for freight trains are the main reason. This is frustrating cross Channel rail freight to and from France, Germany and Northern Italy. FTA has previously commissioned independent economic research into the effects of the current levels of charges and this demonstrated that if they were reduced then consequent increases in traffic would ensue. We shared this work with the European Commission, and earlier this year the EC sent a letter of reasoned opinion to the UK and French governments in respect of the Channel Tunnel, including on charging issues. FTA awaits the outcome of UK’s response with interest.
Mode shift grants
The UK’s state aid permissions for its mode shift grants regimes runs out in 2015 and the DfT is currently consulting with industry on the shape of the replacement regimes. There is little doubt that as a form of pump priming funding the mode shift revenue support scheme (MSRS) has been successful in getting new services started. MSRS ‘buys’ the environmental benefit of taking lorry loads off road and putting onto rail instead with consequent road congestion
December 2013 Page 67
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