Examination of Witnesses (Questions 282-299)
MR SIMON
SALEM, MR
MIKE GARRATT,
MR JAMES
TRIMMER AND
MR JOHN
SPENCER
6 FEBRUARY 2008
Q282 Chairman: Gentlemen, I think I should
confess to you that we are going to be extraordinarily ill-mannered
and leap to our feet—at least some Members will leap to
their fee, others will creep to their feet depending on the mood—and
rush away and possibly, I am sorry to tell you, for twenty to
twenty-five minutes. I am sorry about that, but it is the way
this place works. I am not allowed to continue, naturally, while
the voting procedure is taking place. So could I ask you firstly
just to identify yourselves for the record so that we can at least
get those bits out of the way.
Mr Garratt: I am Mike Garratt,
Acting Chairman of Sea and Water.
Mr Trimmer: James Trimmer, Head
of Planning and Partnerships, Port of London Authority.
Mr Spencer: John Spencer, Managing
Director of GPS Marine Contractors.
Mr Salem: I am Simon Salem, Marketing
and Customer Service Director for British Waterways.
Q283 Chairman: That is extremely
helpful. Did anybody have a few general remarks they could launch
forth into at the risk of being interrupted?
Mr Salem: I think just under three
headings. The first heading is that I think we believe it is a
very good time. We are pleased that the Committee is looking at
this issue now. We sense there is a change in demand for inland
waterway traffic, particularly linked to people's increasing awareness
of the environmental benefits. You have seen some of the supermarket
experiments recently, and we believe that with the right regime
in place and the right partnerships there is perhaps more potential
than there was in the years leading up to now. The second heading
of my three is that with that in mind last year British Waterways
commissioned a report from the economic consultants Oxera and
that in headlines, so that the Committee can think about it, told
us that navigation authorities do not always have the right funding
regimes from Government in order to match the costs that arise
from carrying water-borne freight and that needs to be looked
at and put right. Secondly, it identified that some of the costs
advantages which the inland waterway freight industry have are
very fragile and need to be protected and enhanced, and we would
like to support that. Thirdly, that the environmental benefits
and social benefits of carrying freight on the inland waterways
have probably been somewhat underestimated by previous grant regime
assessments. So we hope that is a useful contribution to the debate.
Finally, I would like to say that with that in mind we have been
discussing the report with a large number of stakeholders in the
inland waterways industry, including colleagues from Sea and Water,
and we shall be holding a round table at the end of this month
to try and get a common platform for creating the right regimes
about inland waterway freight and creating as bright as possible
a future.
Q284 Chairman: So would it be beneficial
for freight policy for inland waterways to be integrated into
a freight plan?
Mr Salem: I think it definitely
needs it. Planning is a very important issue. The more that flows
can be predicted, looking ahead for the longer period of time,
that is very necessary. It is one of the things necessary to protect
the inland waterway operators, the operators of freight investment
plans, because for them to invest in significant amounts of infrastructure—vessels,
unloading facilities, and so on—it is necessary for them
to have some fairly long-term assurances from the planning system
about what is going to happen.
Q285 Chairman: You did use an odd
word about costs. You said they were "fragile". In what
sense are they fragile?
Mr Salem: I think their cost advantage
is fragile, Chairman, in the sense that it depends very much on
the right planning regime, which I have just referred to, it depends
upon issues such as continued subsidy for fuel, which is currently
available and needs to be protected. That subsidy for marine diesel
has been removed recently from the leisure sector. That is not
relevant to this inquiry, but it is a sign of a trend. Of course,
much of their viability depends on the right grant regime to encourage
them to invest in vessels and unloading facilities, and again
they are very vulnerable to changes or inadequacies of that regime.
Q286 Chairman: The need to shift
freight from other modes of transport onto waterways is a bit
of an aspiration, is it not? How do we move from that to something
practical?
Mr Salem: If I may, Chairman,
illustrate from a practical example with the project which is
going on now with the Bow Back Rivers, where we are building what
our engineers call a "water control structure" but which
I prefer to call a lock, which is going to make the Bow Back Rivers
navigable and non-tidal. That is a good example of where tremendous
effort from a wide range of partners, a very wide range of funding
and the kind of forward commitment from the planning regime which
the Olympics gave, and the plans to regenerate East London around
Stratford gave enough certainty—and it was hard—to
create a project which really could go ahead and it is being built
now.
Q287 Chairman: Mr Salem, I do not
want to be ungracious but you were a little bit tardy in coming
to the agreement to get on with the lock, were you not? This Committee
took a very great interest because we were looking, and are continuing
to look, at what was happening with the Olympic Games and transport
generally and we all thought the building of this lock was not
only an extraordinarily good idea but that it would produce immediate
and positive results. But we got the impression that probably
British Waterways was not exactly falling over itself to get on
with it. Was that unfair?
Mr Salem: I think it is a little
unfair, Chairman, although you are entitled to and I respect your
view.
Q288 Chairman: That makes you unique
for a start!
Mr Salem: I have to say that working
with my colleagues in London, side by side with them, I think
British Waterways was very determined to make it happen. I think
it underlines how difficult it is to put together these funding
packages. We put £2 million into an £18 million infrastructure
project and now we are going to deliver that project to the timetable.
There will be tidal lock-out in April and the final complete construction
before the end of 2008. I very much hope, if the Committee has
the time, that at some point in the future it might want to come
and see the project to see how we are getting on.
Q289 Chairman: So is it on time?
Are you telling us that the actual project is on time and will
soon be fully utilised?
Mr Salem: I am absolutely telling
you that and that it links to the Olympic construction phase as
planned, and we would expect during 2009 to see traffic moving
through that as planned.
Q290 Chairman: So it is not being
held up?
Mr Salem: It is not a fantasy.
It is not being held up and you are very welcome to inspect the
work any time you like.
Q291 Chairman: Mr Trimmer wanted
to say something.
Mr Trimmer: I think in relation
to the River Thames the proposals for the carriage of freight
are not just aspirational. We have got more enquiries from operators
wanting to carry freight than we have had for a number of years,
and this is a continuing high number and from operators who have
not used the river before. The issues we face are the planning
system, which seems to be quite a regular occurrence at the Committee,
and also the multiplicity of agencies which one has to deal with
in order to get freight from the roads onto water.
Q292 Chairman: So what is it, Mr
Trimmer? Are you saying to us there are not enough wharves, there
are not enough warehouses? What is the specific thing which snarls
you up with all these different agencies?
Mr Trimmer: Infrastructure in
terms of wharfage is vital, certainly on the Thames where land
values are so high and where the safeguarding policy itself was
instituted ten years ago. That is an important process but through
the planning system it is essentially a negative power. We can
stop developers putting houses on wharves for years and years.
That just means that land lies sterile and we all want to reactivate
it to carrying freight. What we then have to do is to persuade
the Mayor of London and the London Development Agency to promote
compulsory purchase orders, which again take years and years,
and we have a wharf which has remained vacant for the eight years
that I have been at the PLA.
Q293 Chairman: Which is?
Mr Trimmer: It is Peruvian Wharf
in Newham, where we got a planning decision in our favour last
January, where the Secretary of State turned down a scheme for
a mixed use development on the protected wharf because of its
status. We have now promoted a compulsory purchase order with
the LDA on that side and at the moment the owner is progressing
plans to reactivate it for about 600,000 tonnes of aggregate shipped
on the river independently, but in our view the CPO was a major
part of persuading them. So certainly land is a major element.
The second element of the infrastructure is barges and the actual
vessels to carry -
Q294 Chairman: In what sense, that
you have not got them, that they are too expensive, or people
are not investing?
Mr Trimmer: I think a combination
of all of those.
Q295 Chairman: Mr Spencer is taking
a deep breath!
Mr Spencer: Yes, capacity is a
problem. You said that carrying freight on water is aspiration.
It is not. Ten years ago we had 30 or 40 barges, maybe more, which
for most of the year would be idle, whereas today we have got
none. So when people come to me and they want more tonnage moved
by river, we struggle. We need commitment from the planners and
we need commitment from clients to enable us to go and invest,
because one of the big problems we have is that something is in
vogue today and suddenly things change and it is out of fashion.
An example was that Whittaker built a whole fleet of barges to
shift petroleum products and the duty regime changed and their
barges were suddenly redundant. They had to pay the oil companies
to make it worthwhile to shift the products, and we cannot afford
that sort of thing.
Committee suspended from 4.28 pm to 4.51
pm for a division in the House
Q296 Chairman: Mr Spencer, you were about
to make some very provocative remarks. Off you go!
Mr Spencer: It is purely that
we need certainty. We cannot invest in the hope that maybe things
will stay the same for more than three years because with tugs,
barges and ships you have got to look to have that investment
over 10 or 15 years at least.
Q297 Chairman: It is a bit difficult
really, is it not, because if you have any other business in transport
you really do have that kind of certainty, do you not? What sort
of investment are we talking about?
Mr Spencer: For a tug, a small
tug for inland waterways, £1.5 million.
Q298 Chairman: Why should that be
a problem for you if there is an alteration in the business?
Mr Spencer: It is not a problem
in the case of the tug, strangely enough, because most of the
time you can take the tug back to the Continent and use it again,
but barges, particularly in the River Thames and for areas where
BW are in control (for instance Prescott Lock and the Bow Back
Rivers), tend to be much smaller to be used here and so the opportunity
does not exist to take them back to the Continent because they
are just too small to use there. So if we cannot use them here,
we have really got nothing to do with them.
Q299 Chairman: Are UK ports being
utilised effectively for domestic coastal shipping of freight?
Mr Garratt: I think they are perfectly
capable of being used for coastal shipping. Whether they are fulfilling
their potential is another matter.
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