Examination of Witnesses (Questions 300-319)
MR SIMON
SALEM, MR
MIKE GARRATT,
MR JAMES
TRIMMER AND
MR JOHN
SPENCER
6 FEBRUARY 2008
Q300 Chairman: What would you do
to encourage the operators to ship more freight around the coast?
Mr Garratt: I would look at the
planning system. Martyn Pellew from Teesport earlier was talking
about waterside development, warehousing within ports, and introducing
that basically means the destination of the cargo is within the
area water-connected. In terms of transforming the economics of
using water transport that is quite dramatic, so I think that
is definitely well worthwhile pursuing.
Q301 Chairman: Mr Trimmer, could
you make a realistic guess at the percentage of domestic freight
which would be a realistic target for coastal shipping?
Mr Trimmer: I am not sure if I
can. I know more about the Thames itself in terms of potential.
Q302 Chairman: I understand that,
but on the other hand you must have contact with coastal shipping
by definition because at some point it crosses your boundaries?
Mr Trimmer: That is right. I think
there is potential for quite a substantial increase, but in terms
of figures I am not sure I can be any more exact than that. Certainly,
in terms of the bulk cargoes that we move, there is quite considerable
potential with new clean coal power station developments where
the raw materials with bulks are appropriate to move around the
coast and within the inland network.
Q303 Chairman: Mr Salem, have you
done a calculation of how many lorry loads you could shift off
the road—I know it is not your direct field, but using coastal
shipping? What would that be?
Mr Salem: I really am not qualified
to say on coastal shipping. I can give you some idea of the scale
for inland waterways, if that would help. Currently, we are carrying
about 1.6 million tonnes a year, which is quite a small figure
in the overall context, you will appreciate. The sort of scale
of a project—because for us it is about niche markets and
the Olympics and the development beyond there in Stratford is
a well-identified niche market—that could give us an opportunity
to move, say, another half a million tonnes a year if it reached
something like its full potential. So in the context of big increases
from a small base it can make quite a difference to inland waterways.
Q304 Chairman: Mr Garratt, I should
have asked you in the first place. You have got all the facts
and figures?
Mr Garratt: Yes, I have, perhaps.
There are about 60 billion tonne kilometres a year moved by water-borne
freight in the UK. About 18 or 19 billion of those are directly
in competition with road and rail transport, so if we stick to
that for the moment.
Q305 Chairman: So they are not necessarily
the bulk tonnes?
Mr Garratt: Yes, they are bulk
tonnes in terms of coastal petroleum, which is in competition
with road and rail, or aggregates, stone moved up and down the
coast. But I am excluding at that point traffic to and from the
North Sea oilfields, and so forth.
Q306 Chairman: Yes, you are talking
about routine.
Mr Garratt: Yes. Again, trying
to maintain the same storyline, so to speak, we heard earlier
of the possibilities of moving cargo to Tees rather than to Felixstowe
and that would save 150 miles of inland transport, and so forth.
Roughly speaking, if the whole container traffic through Felixstowe
that was heading for the north of England did indeed switch to
coastal shipping, from Felixstowe to Goole, or something like
that, that would equate to about 2 billion tonne kilometres. Set
that against the 18 -
Q307 Chairman: So we are talking
quite serious figures?
Mr Garratt: Serious figures. That
is only 1% of all UK domestic freight.
Q308 Chairman: Yes, but that is not
quite what I was asking about.
Mr Garratt: I know, but I am trying
to give you the context.
Q309 Mr Hollobone: Would Britain's
commercial waterways, both inland and coastal, be better served
if they were the responsibility of the Department for Transport
rather than Defra?
Mr Salem: I think it is a difficult
one to answer, if you look at the range of things which British
Waterways covers, whether it is -
Q310 Chairman: It is not that difficult
because you have given us the quote, have you not, "a unit
within government devoted to waterways freight"? The point
Mr Hollobone is putting to you is, would you get a specialised
unit if it was Transport rather than Defra?
Mr Salem: I think maybe I misunderstood
the question then. I think it is certainly important that there
is a specialised unit within Government that focuses on that and
which builds a good relationship with people like ourselves and
the Environment Agency and navigation authorities. Exactly which
department we have reporting lines to I think matters less.
Mr Trimmer: If I could just add,
the River Thames within the Port of London is classified as a
port and therefore under the administration of the Department
for Transport, but it also is an inland waterway, yet it is classified
as a port within DfT.
Q311 Chairman: You are neither fish,
flesh, fowl, nor good red herring?
Mr Trimmer: We are not. We are
a port.
Q312 Chairman: Are you also, Mr Garratt?
Mr Garratt: I think freight transport
should be the responsibility of the Department for Transport.
I think the language tells all.
Q313 Mr Hollobone: Does British Waterways
place enough emphasis on the importance of freight transport,
or are you too focused on passengers, leisure trippers, and so
on?
Mr Salem: In my judgment, I think
we get the balance about right. Freight is important. The nature
of the freight market has changed. It is not about waterways originally
built to move freight, largely speaking, long distances up and
down the country. We have seen that now this is about niche markets
often in urban areas moving short distances but on important traffic.
So the nature of the traffic has changed. I think we have to be
realistic and say that most of the network was built in the eighteenth
century to a very small gauge. Nobody could conceive that you
would want anything that was longer than about 65 feet, 7 feet
wide. With the most marvellous technological change, the world
moved on and bigger networks on the Continent are more competitive.
So the bulk of the network is for leisure, but I think we have
developed and I think the Olympics is a good example. There are
other examples in London particularly and quite an intense specialism
on getting into partnerships in local niche markets and making
things happen.
Mr Spencer: I think BW does actually
need to look at the balance between leisure and commercial traffic.
The West India Dock has been the source of a great deal of traffic
recently, but commercial traffic pays double the tariff for leisure
traffic and that has seen a significant amount of traffic actually
disappear and put onto the roads. I think 100% uplift for commercial
traffic is a bit high really.
Q314 Chairman: Mr Garratt?
Mr Garratt: No, I am happy with
that.
Q315 Mrs Ellman: In the written evidence
you have all mentioned the problems the planning process poses
for your development. Will the new Planning Bill make a difference?
Mr Trimmer: Yes, I hope so. I
think it was mentioned earlier in terms of the Infrastructure
Planning Commission, certainly on the inland waterways and to
a great extent with short sea shipping a lot of the terminals
will not come within the thresholds to be determined within the
IPC and therefore they will maintain within the planning system.
The principles, in my view, of the planning system are appropriate
now in terms of a plan-led system to provide certainty and that
being filtered down to decision making at the local planning authority.
The issue comes as to how well national policy is applied to the
regions and regional policies applied locally. It is the ability,
as it were, to play the system that provides the issues with certainty,
that planning has. I think if the new National Policy Statement
on ports is expanded to include freight on the inland waterway
network and short sea shipping, and therefore the port system
as a whole, that will improve matters in terms of policy feeding
down through the system, but if it just deals with ports as they
are perceived as containers in and then containers fed out by
whatever means rather than the rest of the inland waterways and
short sea network, I think an opportunity would be lost.
Q316 Mrs Ellman: What about the National
Policy Statements, if there are to be new statements which are
part of the new planning procedure, National Statements referring
to infrastructure relating to inland waterways? Do you see that
as a way to put you on their side?
Mr Trimmer: Potentially, yes.
Of course, Waterways for Tomorrow, the previous inland waterway
policy statement, mentioned freight, I think, in about a paragraph
or two and that was it. I think that was when, of course, there
was one department dealing with planning and environment and transport,
and that dealt with all of that. So I think there is an opportunity,
but we are seeing now with active participation in regional strategies,
in regional planning, it is possible to provide that layer, but
again it is an awful lot of work and we are not finding the last
revision to the planning system has particularly speeded up the
process. The documents are just as long as they always were, in
our view.
Q317 Clive Efford: How effective
is the Sustainable Distribution Fund in improving freight transport
and environmental performance?
Mr Garratt: Lindsay Durham from
Freightliner in the previous session emphasised the railway industry's
support for a system which paid by results effectively, and that
is that every container moved, if it falls within certain qualifications,
generates a grant which is related to the environmental benefit
conferred. That is something which is there to be had, even if
the flow only lasts a year, two years, or three. That is not available
for water transport. The only system available basically is making
capital investments, which are inevitably long-run and require
long-term certainty on traffic which may not exist. So, if that
helps to answer the question, I think payment by results, which
would work very well in terms of the new container barge traffic
across the Thames and on the Manchester Ship Canal, is much more
appropriate. Also, a level playing field with the railway industry.
Just one illustration: there is a coastal shipping service carrying
containers from Southampton to the Mersey. Southampton to the
Mersey by rail gains a grant. By sea it does not, yet the argument
(i.e. moving traffic off the roads) is exactly the same. That
is my answer to that.
Mr Spencer: I think for us it
just does not work. The system as it exists at the moment for
a smallish company means that if we take grants we are always
dependent upon somebody else, for instance dependent upon a cement
company or an aggregate company, and if they change their minds
then necessarily we are left with the grant and the grant liability,
so that gives us a problem. It is such a long-winded process,
frankly, we have got better things to do. We can go and do other
stuff before we go and do that.
Q318 Chairman: Yes, but you do not
turn the grants down, do you, Mr Spencer, if somebody comes along
and says, "It's going to take us six months to sort this
out"? Are you so enormously cheerful that you say, "Thank
you very much," and the accountant says, "I can ignore
it"?
Mr Spencer: No one has ever said
to us that it is there to be had that readily and so because it
is such a long-winded process, as with lots of planning issues,
we just get on with the next thing because rather than deal in
the vagaries of, "Maybe the grant will come and maybe it
won't, and maybe it'll be good and maybe it'll be bad," it
is better to look at something that is actually going to work.
That means that we have never had a grant. We have picked up a
grant liability once, but we have never had a grant, and it is
very, very difficult. Where I think the grant system, the FFG
system, gives us a few problems just right now is that as soon
as a planner says, "You've got to move this spoil,"
or whatever, "by water" instantly the grant is not available.
You see, it is a condition of the grant that you are not made
to do it by water.
Q319 Chairman: It has to be an incentive,
in other words, to something that you are not being told to do?
Mr Spencer: That is absolutely
true, but what happens now is that the planners will say, "You
must use water transport," and the Planning Commission will
move on and then the contractors and the developers will spend
six to eight months, or a year, trying to wriggle out of that
responsibility and move the stuff by road anyway.
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