Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Supplementary memorandum by English Welsh and Scottish Railway Limited (EWS)(RI 09A)

  In June 2000 English Welsh & Scottish Railways (EWS) submitted a comprehensive response to the initial invitation to submit evidence. This submission responds to your further call for evidence.

  EWS, together with the rest of the industry recognises the paramount importance of a safe railway. EWS is playing a full part in the many safety initiatives being pursued throughout the railway community.

  Since June the Government has published the Ten Year Transport Plan. This states that £4 billion will be invested in rail freight over the next 10 years. The freight strategy of the Strategic Rail Authority will need to identify the split between public and private expenditure and between new and existing funding.

  The public sector investment will complement that already undertaken by the rail freight industry. Since 1996 EWS has invested £700 million in 280 new locomotives, 4,000 new and refurbished wagons, terminals and a national control centre. This investment, together with significant improvements in operating performance, has contributed to a 41 per cent increase in rail freight over five years—tonne miles are now at the highest level for twenty years.

  EWS, which is Britain's major rail freight haulier, gave strong support to the Ten Year Plan. The planned investment will help to offset the negative impact on rail freight of the introduction of 44 tonne lorries, reduced Vehicle Excise Duty and lower fuel duty.

  However, the Ten Year Plan is only one element of the public policy necessary to deliver the 80 per cent growth in rail freight anticipated by both the Government and the rail industry. The current review by the Rail Regulator of freight access charges will be fundamental to the future of freight on rail.

  EWS has made a number of submissions to the Rail Regulator to support the case for significantly lower freight track access charges. We have provided technical and economic arguments with the assistance of world-leading railway engineers and strategic consultants. We have stated that:

    —  the efficiency factor to be assumed in freight track access charges should be higher than that assumed for passenger charges. This is based on international best practice in engineering techniques and use of materials and the use of more efficient practices on freight-only and freight-dominated routes;

    —  the efficiency factor should recognise both catch-up and long-run efficiency and should be based on the efficiency achievable over of 10 years or more;

    —  the application of the efficiency factor should recognise the need to reduce freight track access charges, which are essentially the rail equivalent of fuel duty and Vehicle Excise Duty, as soon as possible.

  EWS agrees with both Government and the Strategic Rail Authority (SRA) that investment in the rail network to provide capacity for freight on rail is best funded by the SRA. EWS's 10 year network investment plan has been submitted to the SRA for consideration in its network and freight strategy. EWS's plan focuses on the need for:

    —  increased capacity for freight traffic;

    —  enhanced network capability to operate longer trains;

    —  enhanced network capability to operate higher and wider trains;

    —  the ability to run heavier trains;

    —  the ability to operate freight services 24 hours a day, seven days a week.

  In our response to the SRA's consultation on public support for rail freight, we emphasised that the SRA's priority must be to fund and facilitate investment in the rail network. Focused revenue support has a role to play but capital expenditure in the network is the primary route to the growth of rail freight.

October 2000

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