Memorandum by the Piggyback Consortium
MEMORANDUM OF EVIDENCE SUBMITTED ON 30 NOVEMBER 1998
TO THE HOUSE OF
COMMONS ENVIRONMENT, TRANSPORT AND REGIONAL
1. The Piggyback Consortium was formed in 1993
with the aim of securing an increase in the railway loading gauge
(the height and width of structure over the track) so that 4 metre
high semi-trailers could be carried by train at least between
the Channel Tunnel and Scotland.
2. Railtrack gave oral evidence to the Committee
on 18 November 1998 during which it was suggested that creation
of the full piggyback loading gauge ("PB gauge") required
to meet the Consortium's aspirations was not the best way to serve
3. This evidence explains why the Consortium
believes PB gauge to be necessary to bring about a significant
transfer of lorry traffic from the M1, M6 and M25 motorways in
particular, and responds to some of the arguments put forward
by Railtrack in favour of adopting a smaller loading gauge enhancement.
4. Until July 1998, Railtrack was an active
member of the Piggyback Consortium. It commissioned market studies
from Deloitte & Touche Consulting Group which confirmed the
conclusion of an earlier study by MDS Transmodal that there was
a significant market for high gauge piggyback traffic.
5. On 25 March 1998, Railtrack published its
annual Network Management Statement which said on page 74:
"Through our involvement in the Piggyback
Consortium we have taken the lead in developing and investing
in the project to enable higher gauge freight to be transported
by rail from the Channel Tunnel to London, the Midlands, the North
and Scotland. The freight involved could include road trailers,
swap bodies and 9 ft 6 in containers. The result would be to transfer
up to 400,000 long distance lorry journeys every year from road
to rail . . .
"We have now finalised the previous estimates
of the capital costs for enhancing the route via London and along
the whole of the west Coast Main Line and for developing an alternative
for part of the route to bypass London . . .
"The next step is for us to work in parallel
with the DETR, ORR and our customers to finalise the funding package.
From our discussions to date, we expect part of the funding to
be provided by the DETR under its existing mechanisms for encouraging
the transfer of freight from road to rail"
6. All appeared to change in July; since that
date, Railtrack has sought to demonstrate that the market for
high gauge piggyback is no longer significant and that a lower
gauge to accommodate 9 ft 6 in containers on flat rail wagons
will satisfy the market better.
7. The Consortium maintains that Railtrack is
confusing two separate markets in order to avoid investing its
own money in freight-related infrastructure improvements. This
memorandum highlights the paltry share of freight-related investment
to date, and suggests reasons to Railtrack's sudden change of
8. It concludes by outlining means, through
Section 17 of the 1993 Railways Act and the regulatory process,
to force a gauge upgrade on Railtrack. It also suggests that such
unwillingness to take reasonable risk in their investment should
be taken into account by the Government when setting the guidance
to the SRA and Rail Regulator, and by the Rail Regulator in his
current Review of Railtrack's Access Charges.
9. Members of the Piggyback Consortium are listed
in the appendix. They include customers and customer groups (Road
Haulage Association and Freight Transport Association) who collectively
are keen to see the introduction of piggyback on rail in the UK,
starting with the Channel Tunnel to Glasgow corridor.
10. Thrall Eurospine wagons are now in service
for Parcelforce between London and Glasgow, and Babcock's first
MEGA 3 pocket wagon is at present going through its approval process.
English Welsh and Scottish Railway has ordered 20 Eurospine wagons
from Thrall, each capable of carrying four trailers, and Freightliner
has signed a letter of intent to order 110 of Babcock's MEGA 3
wagons. Both wagon designs allow standard width trailers to be
carried. These wagons can also carry deep-sea containers and swap
bodies. Freightliner has started a Manchester-Tilbury service
using the former Charterail wagons, which require trailers with
reduced width wheelbases.
11. All these pioneering piggyback services
operate using low height trailers, suitable for tanker traffic
(chemicals, etc.), and heavy loads since these are the only ones
which can get within the present loading gauge height in the UK.
12. Among the many markets open to rail freight
now, two of the largest are lorry semi-trailers and deep-sea containers.
13. Lorry semi-trailers carry 74 per cent UK's
road freight (measured in tonnes-km in 1997), and the majority
of these (about 75 per cent) are built to the largest permissible
size to enable them to carry the greatest volume. They also carry
75 per cent of general cargo between the UK and the continent.
This preponderance of high-sided lorry semi-trailers is evident
on all major motorways.
14. It is this large market for the highest
semi-trailers that piggyback seeks to attract to rail. With the
exception of the niche but still significant tank and heavy goods
market, which can be carried by rail at present, the customers
(logistics service providers and many RHA/FTA members) demand
the greatest trailer height to achieve volume. They are not interested
in purchasing specialised equipment which carries less volume
just to enable it to be carried by rail.
15. The effective maximum height for trailers
engaged on international journeys is 4 m road mode. On rail, with
the air springs deflated, this height of trailer plus the rail
wagon just fits into PB gauge. It also happens to fit just within
the GB+ loading gauge, which is the standard in all parts of Northern
Europe and on selected routes between the Channel Tunnel and Italy.
Deep sea containers
16. Deep-sea containers (boxes) are carried
between ports such as Felixstowe, Southampton, Tilbury, and Liverpool
to centres of manufacture or consumption. Their height varies,
generally between 8 ft 6 in and 9 ft 6 in.
17. Whereas the 8 ft 6 in boxes are carried
today on the main routes in Britain on standard rail flat wagons,
the newer 9 ft 6 in high boxes cannot be carried on such wagons
within the existing loading gauge.
18. The 9 ft 6 in boxes now comprise 10 to 15
per cent of the market with this share growing rapidly. If the
railways wish keep their market share, let alone increase it,
they will have to raise the gauge height to accommodate the 9
ft 6 in high boxes on flat wagons or build special low wagons
at extra cost. This new gauge (called here the "9 ft 6 in
gauge") is 230 mm (9 in) lower than PB gauge.
19. The main market for piggyback is alongside
congested motorways, particularly the M1 and the M6. That is why
Railtrack, at the time when it was supporting piggyback, chose
the West Coast Main Line for the piggyback upgrade.
20. The 9 ft 6 in container traffic however
needs to access to major deep-sea container ports: Felixstowe,
Southampton, Tilbury and Liverpool. This particularly affects
the Nuneaton-Peterborough-Felixstowe and Birmingham-Reading-Southampton
21. Both the PB gauge route from Glasgow to
the Channel Tunnel and the 9 ft 6 in gauge for deep-sea containers
to ports are described in Railtrack's 1998 Network Management
Statement, map page 67.
22. We understand that Railtrack has argued
that a network of 9 ft 6 in gauge routes as described above will
be able to capture 90 per cent of the "market". We question
which market. If it is the deep-sea container market, that may
be correct in the long term, and the proposed upgrade to 9 ft
6 in gauge on these routes is very much to be welcome.
23. However, such a gauge can probably only
cater for less than 20 per cent of the lorry semi-trailer market
which, although welcome, is still only a niche in a very much
larger market, and on routes which generally follows congested
motorways such as the M1 and M6. These routes require PB gauge
to make any significant inroad into the lorry semi-trailer market.
24. Thus, there are two very different markets,
with some small overlap. They should each be treated on their
own merits, not mixed and confused.
PB GAUGE ENHANCEMENT
25. Railtrack chose the WCML for gauge enhancement,
and freight operators have welcomed it since it provides the fastest
service and access to more terminals.
26. We believe, however, that Railtrack is now
realising that there are severe capacity constraints on the WCML,
and that the proposed transmission based signalling, on which
the capacity enhancement is based, is unlikely to be fully operational
for many years. Experts in the industry have noted that, if all
the passenger train demands are met south of Milton Keynes, there
will be no capacity at all for freight during the daytime.
27. Freight operators have asked for the following
capacity on the part or all of the WCML for 2008:
|Trains per day in each direction||Standard gauge
Other new operators may also wish to bid for paths.
28. We therefore have to question whether one of the main
reasons for Railtrack's sudden change from full support for PB
gauge to outright opposition may not be unrelated to the fact
that, if they cannot provide capacity for standard height trains,
why spend money on gauge enhancement to increase demand still
29. It also begs the question as to why Railtrack has not
considered seriously alternative routes to the crowded southern
end of the WCML either for high gauge or standard gauge trains.
30. We believe that Railtrack's estimated cost of piggyback
upgrade on the WCML is £250 million. This is made up of engineering
costs plus compensation costs to other train operators when their
trains are delayed by such works:
|£ million||£ million
|Upgrade two slow tracks||75
|Upgrade all four tracks (Rugby to Wembley)
|Source: Railtrack December 1997.
Railtrack says that all four tracks must be upgraded, since
their maintenance regime requires nightly closures of one or other
pairs of tracks.
31. Railtrack states that, for construction of the gauge
upgrade, it has also allowed for possession (closure) times on
WCML south of Rugby of either two tracks closed for 21 months
or four tracks closed for up to six months.
32. The Consortium believes that these figures are grossly
inflated and has to agree that possessions for the length of time
proposed would be unacceptable to all users of the railways. However,
we do not believe that they are necessary to achieve such a gauge
upgrade, since there are a number of creative suggestions which
could reduce costs and possession times very significantly. We
would have expected Railtrack to investigate these fully already
in view of the quotes from the Network Management Statement contained
in paragraph 5 above. They include:
rearrange maintenance possessions so that one
slow track is always open. Saving on capital costs about £148
million to be balanced against slightly higher maintenance cost.
Upgrade slow lines only and provide diversion
for the PB gauge route when WCML slow lines closed via Reading/Oxford/Leamington
Spa or Midland Main Line. Likely saving about £100 million.
Look at construction methods and capital costs
again to minimise costs to freight, for example:
Consider double shield construction method for the nine tunnel
bores south of Rugby requiring just six hours possession each
night and allowing trains to run in daytime in between, possibly
removing 75 per cent of compensation costs, say £80 million.
The total reconstruction of Kilsby Tunnel on fast line south
of Rugby is unlikely to be necessary for PB gauge enhancement,
although we believe that this may be required anyway because of
its poor state of repair. In this case, the costs should not be
attributed to PB gauge upgrade. For these reasons, about £30
million could be saved by doing only minor works since clearances
are only just out of gauge.
33. Thus, we believe that Railtrack could, if it wished,
find significant savings to bring down the cost, including compensation
to train operators during construction, to under £150 million.
34. The Piggyback Consortium has never believed that the
gauge enhancement project could be achieved without government
grant, but equally there were strong indications that such a grant
would be given sympathetic consideration if an application were
35. So far, Railtrack has neither applied for a Freight Facility/Track
Access grant from the DETR, or for a Trans-Europe Network (TEN)
fund grant for this project.
36. Assuming a 50 per cent grant, made up from DETR and TEN,
how much might be required from grant sources and Railtrack for
the Channel Tunnel to Glasgow PB gauge upgrade to take 400,000
lorries a year off the road?
|Total capital cost including compensation to TOCs
|£ million||£ million
|Railtrack's current estimate||250
|Lower, more realistic estimate||150
37. If the construction period is five years, that makes
Railtrack's annual investment in piggyback between £15 million
and £25 million. This might not seem excessive compared with
Railtrack's total investment in 1998-99 of £1,450 million.
However, it is large compared with Railtrack's investment in freight
infrastructure in the current year of £5 million.
38. Since Railtrack's revenue from freight is about 10 per
cent of its total revenue from all train operators, one might
expect that 10 per cent of its investment should be in freight
infrastructure. This would equate to £145 million per annum.
|Railtrack's total investment 1998-99 ||1,450
|of which investment in freight infrastructure
|Investment required from Railtrack for piggyback gauge per annum for five years (assuming 50 per cent grant)
||15 to 25|
|With ratio of passenger to freight revenue of 10 to 1, if investment made in same ratio, Railtrack's annual investment in freight would be
39. Comment has also been made by Railtrack that freight
operators should purchase long-term capacity. No doubt Railtrack
would like that since they argue that passenger TOCs do just that,
but the TOCs are only able to do so because they have a virtually
guaranteed revenue from OPRAF. Freight does not, and is in competition
40. Shippers do not make long term commitments either to
the Highways Agency to use the motorways or to ports to help finance
new berths. Port authorities or ferry companies assess the market
and make their own investment decisions accordingly, taking the
commercial risk that the traffic and revenue will be forthcoming
when the new facilities open for business.
41. We are uncertain as to what are the real reasons behind
Railtrack's sudden rejection of the piggyback gauge upgrade might
it could be a "misunderstanding" of
the two different markets for containers and trailers;
it could be a realisation that it cannot provide
capacity on the WCML even for the trains which do not require
gauge enhancement. If this were the case, then we would expect
Railtrack to offer alternative routes for piggyback;
it could be unwillingness to invest even moderate
sums of money (when put against Railtrack's overall figure) even
if it is alongside a substantial grant.
42. The Consortium awaits with interest a meeting with Railtrack
on 8 December where we hope to receive answers to our questions.
43. Members of the Consortium are also considering seriously
the possibility of applying for the DETR grants and for a Network
Change order under the Access Conditions, as well as for access
for high gauge piggyback under Section 17 of the Railways Act,
to force Railtrack to do the work or to allow others into the
tracks to do it.
44. We also hope that the Government will take into account
this experience in setting the Objectives, Instructions and Guidance
to the shadow Strategic Rail Authority and Guidance to the Rail
Regulator, and by the Rail Regulator in his Periodic Review of
Railtrack's Access Charges.
45. In the meantime, we conclude that Railtrack's investment
in freight infrastructure last year was derisory. It may increase
this year. Sad to say, these problems seem to stem from an apparent
lack of interest in freight on Railtrack's part.
46. If the company were serious about encouraging rail freight,
it would see piggyback as an important element in the growth of
freight. It would seek solutions to make it happen in the most
cost-effective way, as many of its staff were trying to up to
last summer, and apply for grants to help fund it, rather than
come up with more and more bizarre reasons for not doing it.
29 November 1998