Examination of Witnesses (Questions 14480
- 14499)
14480. Can I ask you about port forecasting
and in particular port forecasting with regard to rail freight.
Have you been involved in that?
(Mr Garratt) I have.
14481. To what extent has your work featured
within any Government forecasting or consultation with regard
to ports and rail freight capacity?
(Mr Garratt) It is the basis
for the forecasts within the current port consultation exercise
currently out for consultation by the Department for Transport.
14482. So when, as we are going to in a few
minutes, we are talking about the amount of freight traffic that
is coming from the ports and the figures in that context, are
those figures as far as you are aware figures which from the Government's
point of view are regarded as uncontentious?
(Mr Garratt) I would hope
so, yes.
14483. Let us move from those general matters
to things more specific. The Committee obviously is familiar with
what is involved in Crossrail. Can you tell me please as far as
your evidence is concerned this afternoon what is the overall
plea that you want to make to the Committee, the overall message
that you want them to take away?
(Mr Garratt) Very simply
that there be joined-up thinking so that Crossrail does not create
other problems which themselves could have a wider impact, that
is, that the act of authorising Crossrail and proceeding with
it does not create problems in the rail freight area which would
have added impacts, including on the ports industry and on the
aggregates industry.
14484. Those two particular industries, aggregates
and container ports, how important is rail freight in terms of
the amount of material that is moved by rail?
(Mr Garratt) A very substantial
proportion. We have heard a few minutes ago that rail freight
plays a very important role in the aggregates field, something
like 30 or 40% of all aggregates coming into the capital. In so
far as maritime containers are concerned, around 25% of all maritime
containers coming into the UK use rail and all that is through
south east ports.
14485. What about growth in those markets?
(Mr Garratt) There is growth
in both markets. The construction industry will obviously play
a major role in some of the developments in the south east, particularly
Thameside, and as far as maritime containers are concerned forecasts
are that that volume will triple over the next 25 years, and clearly
rail is expected to play a major part in that.
14486. Chairman: Is that because the
ports transfer of container goods is having to increase because
of shortages in the container industry or is it general?
(Mr Garratt) There is no
question that we are in the process of globalisation so the volume
of port traffic is to a certain extent dictated by a great deal
of substitution of domestic production by imports.
14487. Clearly if it is produced elsewhere in
the UK then it will not be transferred by freight elsewhere in
the UK. Is that tripling coming in because we are running out
of aggregates in the UK?
(Mr Garratt) Oh, no, I am
sorry; I was referring to containers at that point. As far as
aggregates are concerned, we are not talking about the ports industry
at all.
14488. The growth is not important?
(Mr Garratt) Correct.
14489. Mr Kingston: Mr Garratt, we know
that we have different traction suppliers in terms of rail freight,
four, I think. Is that right?
(Mr Garratt) Four and more
on the way.
14490. A competitive environment there?
(Mr Garratt) A highly competitive
environment, yes.
14491. And how important is that competitive
environment from the point of view of achieving growth in the
use of freight, something which we understand to be a Government
objective for rail freight?
(Mr Garratt) I think it
is extremely important and the evidence is there to see. Since
privatisation rail freight has grown by about two-thirds and you
could say that the most important aspect post-privatisation is
the creation of a competitive environment.
14492. In brief what happens to the competitive
environment if there is not enough capacity to satisfactorily
accommodate freight on the rail network?
(Mr Garratt) That level
of competition clearly declines because the parts controlled by
the resident operator, as it were, would stay with that operator
and the level of competition, the degree of new entry level, would
decline.
14493. If competition declines what happens
to prices?
(Mr Garratt) They rise.
14494. And what happens to usage if prices rise?
(Mr Garratt) I would expect
it to fall.
14495. And if rail freight falls what happens
to road transport?
(Mr Garratt) Road freight
will grow.
14496. And how is that consistent with Government
policy to diminish rail and increase road?
(Mr Garratt) It is not consistent
with Government policy for sustainable distribution.
14497. We had a reference earlier this afternoon
and therefore do not need to repeat it to the Minister's policy
statement on 19 July 2005. Do you recollect that?
(Mr Garratt) I do.
14498. Just highlight for us, but not repeating
the policy statement, those bits of it which from your point of
view seem particularly important that the industry wants to put
before the Committee please.
(Mr Garratt) I think the
most important aspects are that the Secretary of State's statement
reiterated that Government recognises and wishes to encourage
the important environmental and economic benefits that rail freight
can bring and that it expects the industry to bring forward robustly
based forecasts on which capacity would be based in the future.
One aspect I would like to read out is. "In order for rail
freight companies and their customers to invest in the uncertainty
about where and when they run their trains on the network the
Government will work with industry to develop robust demand forecasting
and modelling tools and to ensure that it understands the needs
of the freight industry when developing its high level outward
specification and other key policies. We would ensure that our
appraisal methodologies treat freight and passenger interests
equitably".
14499. "To ensure that appraisal methodologies
treat freight and passenger interests equitably", what do
you understand that to mean in practical terms? Does it mean that
freight should give way to passengers?
(Mr Garratt) I think the
reverse. I think freight and passenger interests should be considered
in parallel and that existing freight interests should be recognised.
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