Examination of Witnesses (Questions 234-239)
MR PAUL
PLUMMER, MS
BARBARA BARNES,
MS LINDSAY
DURHAM AND
MR GRAHAM
SMITH
6 FEBRUARY 2008
Q234 Chairman: Good afternoon to you.
You are all most warmly welcome. Will you identify yourselves
for the record, please, starting on my left.
Ms Durham: I am Lindsay Durham.
I work for Freightliner.
Mr Smith: Graham Smith, Planning
Director, English, Welsh and Scottish Railway.
Mr Plummer: Paul Plummer, Director
of Planning and Regulation at Network Rail.
Ms Barnes: Barbara Barnes, Head
of Customer Service, Network Rail.
Q235 Chairman: Thank you. Does anybody
have anything they want to say briefly before we begin?
Mr Smith: Yes. This examination
is a focus on rail freight and rail freight has been one of the
success stories of the last twelve years of government policy
and private sector involvement. It has grown by 70% and now has
an increased market share, 12%, greater for longer distance. The
opportunity for rail freight growth is significant. We have not
yet seen, I think, a major modal shift from road to rail, but
the combination of Government's and Network Rail's focus on the
infrastructure and the operators investing in rolling stock, equipment
and their resources, when combined with the environmental benefit
of freight on rail, means that we have a strong and very positive
future.
Q236 Chairman: So are you saying
that the current arrangements give us a potential benefit to rail
freight transport on a commercially viable basis?
Mr Smith: Rail freight is certainly
commercially viable. At the time of privatisation the infrastructure
was with Railtrack. The freight operating companies were sold
outright, not as franchises. There was significant private investment
in locomotives, wagons and terminals. We believe that combination
does work and we are particularly pleased to see that Government
now recognises the need for increased capacity on the network
and is earmarking, albeit a comparatively small sum in railway
terms, £200 million to develop a strategic freight network
on the UK network in Control Period 4, from 2009—2014.
Q237 Graham Stringer: You said in
your introductory remarks that freight on the railways has grown
by 70% over the period of this Government. Exactly ten years ago
we had EWS here in a rail inquiry and they told us there was going
to be a 300% growth. I remember the figure precisely. What has
gone wrong?
Mr Smith: That was a statement
by the then Chief Executive, Mr Burkhardt, who had identified
that at that point rail freight had an 8% market share and had
anticipated significant growth in bulk commodities, inter-modal
traffic and in traffic through the Channel Tunnel. The issues
with the Channel Tunnel are well-recorded. We may revisit them
today. Like the rest of the industry, we faced a crisis of confidence
following the collapse of Railtrack, which actually saw rail freight
volumes decline. But we are now seeing that growth again and I
believe that 70% growth to date and an expectation from all parts
of the industry that in tonne miles terms you will have a 50%
growth on today's base by 2014 and a doubling in the longer term.
Whilst Mr Burkhardt's forecast has not been met, there is significant
growth ahead.
Q238 Graham Stringer: What I am not
clear about from that answer is, was the projection then reasonable
and it has been knocked off course because you do not have the
access you would like to the Channel Tunnel and Railtrack were
a disaster, or was it an unrealistic estimate?
Mr Smith: It was an estimate based
on a number of things relating to fuel prices, access charges,
planning permissions for terminals all going together. It was
a high side forecast. It could have been achieved, I think, if
all policy matters had come together. They did not. These things
tend not to. I think from where we are today, though, that looking
for a doubling in the longer term following 70% growth is perfectly
achievable.
Q239 Mrs Ellman: Do you agree with
the Government and its view that freight is essentially the business
of the private sector?
Ms Durham: Yes, we do think it
is essentially the private sector. I think customers want to make
their own choices as to which port they go to, which operator
they use.
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