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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
In July, the FTA welcomed the government announcement
of a £200m investment fund in strategic rail enhancements
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
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