Memorandum by English Welsh and Scottish
Railway (RR 11)
RURAL RAILWAYS
INTRODUCTION
EWS is a major stakeholder in Britain's railway
and rail freight is the success story of railway privatisation.
Since 1995:
— £1.5 billion has been invested
by the private sector, and is continuing
— new equipment allows big efficiency
gains for customers and all rail-users
— volume has grown by 50%
— rail has outpaced road, increasing
market share: rail now has more than 10% of UK surface freight.
For its part, EWS has invested £500 million
of its own funds in systems and equipment to underwrite this growth.
State support over this period has been minimal and confined to
the Freight Grants that have been suspended sine die since January
2003.
More important than this is the stake that our
customers and their end-users have in rail. Many sectors of UK
industry rely on rail freight, ranging from well-established customers
that use rail to move bulk products, to a growing number of manufacturers
and retailers of household products—the ready availability
of which consumers take for granted.
Firms that rely on road alone for their supply
chains are facing significant problems including road congestion,
the Working Time Directive and continuing shortages of skilled
HGV drivers.
"The cost of running a car has continued
to fall while fares on public transport have risen sharply. Despite
the Government's pledge to lure people out of their cars, figures
(by RAC's Insure Motor Index) showed that motorists spent a weekly
average . . . between April and June 1.7% . . . less than in the
first three months of the year. It contrasts with large fare increases
for rail and tube passengers this year."
("The Independent", Monday 1 September
2003)
"Companies are facing an uncertain future as
regards the reliability and costs of road freight services to
supply their factories, warehouses, outlets and their customers.
The pressures on road freight from regulations such as the Working
Time Directive and drivers' hours rules, increasing congestion,
road user charging, fuel price increases and shortages of qualified,
experienced drivers are not merely problems for UK road freight
logistics but extend across Europe."
(FTA: "Information on key issues",
updated 5 August 2003)
The SRA is proposing that a different approach
is taken to the management and development of the Rural Railways
in England and Wales. Its views are set out in "Community
Rail Development. A consultation paper on a strategy for Community
Railways, February 2004".
Whilst EWS endorses a number of the SRA's proposals
it is concerned that the adoption of the strategy does not undermine
the ability of the rail freight industry to operate now, or in
the future, on routes that are critical for the freight business.
WHAT FREIGHT
REQUIRES OF
THE RAIL
NETWORK
For rail to continue to serve UK industry and
thus the wider economy and for rail's role to continue growing,
EWS requires a rail network with the following characteristics:
Customers expect rail to be responsive to changes
in their needs and for the response to be rapid. This means that
the rail network must be able to handle additional freight trains
at short notice and over a range of routes.
Customers increasingly expect rail to be constantly
available irrespective of time of day or day of week, on a 24/7
basis. This means that alternative through routes must be accessible
when usual lines are not usable for planned or un-planned reasons.
Customers expect to use rolling stock which is
fit for purpose and which meets their needs. This means that wagons
must have carrying capacities that meet the weight and dimensions
of the loads they require EWS to move.
Customers expect rail to be price competitive
with road. This means that line speeds and timetable pathways
must permit both customers and EWS to obtain the necessary high
levels of utilisation of the assets used (wagons, locomotives,
staff).
Customers have their own rail-served facilities—or
share sites provided by third parties including EWS—across
the rail network. These represent significant commitments to rail
and continuity of access via them is essential for customer confidence
and—often—the viability of the customers' own activities.
Freight shares access with passenger operators
on a significant majority of the lines listed in the SRA's consultation
document. As with the rest of the rail network, EWS has access
rights that are enshrined in our Track Access Agreement and these
rights are protected from unfair behaviour on the part of Network
Rail and other train operators by the Rail Regulator. It is essential
that EWS and our customers continue to enjoy this security throughout
the rail network.
DO THE
SRA'S PROPOSALS
MEET FREIGHT'S
REQUIREMENTS OF
THE RAIL
NETWORK?
EWS gives its broad support to many of the stated
intentions that lie behind the SRA's proposals. All players in
the railway industry should play their part in ensuring that capital
and revenue expenditure on the network gives best value for money
and is not wasted. EWS supports the SRA's aim of seeking innovative
ways of achieving this and agrees that a reduction in the size
of the UK rail network is not a realistic option.
In light of the points we make in section (2)
above, there are specific issues raised by the SRA's consultation
document that EWS would draw to the attention of the Committee:
EWS supports efforts by groups such as Community
Rail Partnerships and the Highland Rail Partnership to encourage
greater use of rural railways by passenger and freight customers.
The use of "cascaded" passenger rolling stock and freight
locomotives (such as those owned by EWS) can offer a cost-effective
means of providing additional capacity at times of peak demand.
In section 4.4 of their consultation document,
the SRA suggests, "more flexible enhanced" timetables
could be introduced to meet seasonal peaks in demand. EWS is concerned
that many rural lines have modest infrastructure capacity and
we warn against any over-intensity of service pattern where it
could adversely affect freight train performance.
In section 5.5 of their consultation document,
the SRA suggests that the penalty regime might be relaxed to allow
passenger trains to be more readily held for connections. EWS
is concerned that this would result in out of course running of
passenger trains on rural lines. Since many have modest infrastructure
capacity to absorb late running, there could be a knock-on impact
on the time keeping of freight trains. Late running may be of
little consequence to some passengers but if it should inconvenience
a single freight customer, the result may be the eventual loss
of an entire freight flow.
In section 5 of its consultation document, the
SRA suggests that infrastructure maintenance costs may be reduced
through the adoption of variances from national Group Standards,
with the help of risk-assessments, and through improved day-to-day
attention to track. Whilst this may have some benefit it should
be understood that the provision of infrastructure is only a small
part of the cost of operating the Rural Railway. That said, and
subject to proper consultation, EWS supports these approaches
in principle and we note, and welcome the fact, that the SRA makes
no suggestion that cost savings would be made by reducing (i)
line speeds and (ii) axle-loadings for freight trains. Such measures
could damage rail freight's viability and result in a loss of
business.
In sections 5-10 and 5-11 of their consultation
document, the SRA proposes the use of lightweight passenger vehicles
(LRVs) as a means providing low-cost replacements for existing
equipment and to afford savings in signalling costs. EWS is not
convinced that such an approach would be compatible with the continuation
of heavy-rail services such as freight. We have had recent experience
where the extension of Metro systems has reduced freight capacity
because of the need to provide additional operating margins.
In section 4.6 of their consultation document,
the SRA proposes that "local management" of rural lines
would combine the roles of train and infrastructure operation
and maintenance. In section 2.4, micro franchising is examined
as a way of making rural lines more viable, while in section 2.5,
the issue of devolving control to the Scottish and Welsh government
administrations and to the PTEs. EWS vigorously opposes the vertical
integration of train operation, track access and track maintenance.
It is not in the interests of freight customers to rely on the
goodwill of an incumbent operator for fair access over any part
of the railway network. We will oppose the devolution of rural
railway control if we believe it would encourage vertical integration.
We note that the SRA is careful to suggest a
"simpler regulatory regime" be applied only to rural
lines with no potential for freight (section 5.3). As an incumbent
operator over most of the rail network, EWS would vigorously oppose
any attempt to reduce the powers of the Rail Regulator on lines
over which we operate or may operate in the future.
In section 3 of their consultation document,
the SRA states that "Community Rail" designation would
typically be given to lines that "do not carry international
passenger or freight traffic via the Channel Tunnel". EWS
understands the view that EU interoperability would impose standards
of operating and maintenance that are higher than necessary for
rural lines and that it may be desirable for rural lines to be
excluded from the "conventional network", as set out
in section 5.1.
EWS notes that the SRA qualifies its definition
by the word "typically" (paragraph 4, section 3). EWS
is concerned that flexibility is maintained as far as this aspect
of definition is concerned: freight flows evolve over time and
can change from shipment traffic (where the goods are handled
via a UK port) to Channel Tunnel traffic (where the goods are
moved direct by international freight trains).
EWS has a more fundamental concern over this
issue: interoperability should not be regarded as applying only
to international freight trains. It is the intention of the European
Commission that access by domestic freight train services should
be covered by interoperability. Referring to "international"
freight traffic may be making a false distinction.
Freight and non-freight lines
In several sections in its document the SRA refers
to lines "with no potential for freight" in the context
of its proposals. In seeking to apply some measures solely to
lines "with no potential for freight" the SRA rightly
seeks to avoid adversely affecting freight interests. The market
for rail freight continues to evolve and change its extent. At
the start of the railway privatisation process, few anticipated
the substantial growth in rail freight volume that would then
take place.
Today, rail freight continues to find new customers
and serve new locations both in "traditional", "mature"
markets such as construction materials, steel and petroleum products,
and in "new" markets such as food and drink and other
"FMCG".
The SRA should also be aware that rural lines
which are through routes (rather than branch lines) may have little
or no regular freight services—but may serve a vital role
handling diverted freight trains when usual routes are unavailable
for whatever reason. The SRA should not assume that the absence
of scheduled freight services will allow the introduction of operating
or maintenance regimes that are unsuited to freight trains.
CONCLUSION
EWS generally supports the SRA's proposals to
increase the use of the Rural Railway and to encourage local participation.
We do, however, have a number of concerns that
we will be lodging with the SRA as part of the consultation:
— A number of the routes listed in
the SRA's consultation are vital for existing freight traffic
and have the potential for freight growth in the future.
— The SRA should revisit regularly
its list of lines proposed for Community Rail designation as set
out in Appendix C of their consultation document. This will help
to ensure that changes in traffic levels are taken into account.
— The SRA should consult fully with
EWS and other freight operators before allowing irrevocable changes
to lines "with no potential for freight".
— The SRA should recognise that freight
operators' rights to use the network are governed by legally binding
track access contracts between them and Network Rail.
— Any changes to the capacity or capability
of any part of the network must be processed through the industry
change process contained in the Network Code.
— We would not support proposals that
created vertically integrated lines or routes.
— It is for the Rail Regulator to determine
any dispute under this process EWS hopes that the above comments
may inform the Committee's Inquiry. We would be happy to give
oral evidence on the matters covered above if the Committee wishes.
April 2004
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