Memorandum submitted by Nicholas MacWhirter
BRITISH WATERWAYS
FUNDING CRISIS
In 2006, British Waterways commissioned the
consultants Oxera to examine the carriage of freight on inland
waterways. The stated background to the report was that "BW
is concerned that it effectively subsidises freight traffic, and
that the benefits of freight traffic may not be as substantial
as policy makers and funding bodies assume, since the costs to
BW may not be dealt with appropriately."
Oxera's very detailed report assumes an income
to BW based solely on a 1.13 pence per tonne. kilometre toll rate.
It does not seek to investigate potential traffic on the waterway
network in the future and it therefore does not consider other
sources of income for BW that freight might yield. My submission
to the Committee on the 12 March this year pointed out that fees
for transferring waste from HGVs to barge could produce an income
for BW of up to £22 million per year in London alone based
on current waste transfer rates. Such transfer to barge is a stated
part of the London Plan, as quoted in section 7.4 of my evidence
to the Committee last year.
Understandably, Oxera did not include potential
new sources of revenue to BW in their analysis. Nevertheless,
their report concluded:
"However, using fully allocated costs
as the benchmark may not be appropriate, since many of these costs
would still be incurred if water freight ceased to operate. Therefore,
a preferable approach would be to compare the avoided externalities
with incremental costs. On this basis, the subsidy would be around
only £37,000, suggesting that waterways offer reasonably
good value for money."
The Committee's attention is drawn to the report—it
contains much of interest. More than a year after it was completed,
it remains unpublished.
Water freight could produce a very large income
stream indeed to an enlightened BW at little cost to the Government,
in the process contributing significantly to a reduction in urban
road congestion and transport's carbon footprint.
I would urge the Select Committee to encourage
British Waterways to take advantage of this opportunity.
Nicholas MacWhirter
March 2008
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