CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 854-i v

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

WELSH AFFAIRS Committee

INWARD INVESTMENT IN WALES

Tuesday 7 JUNE 2011

professor stuart cole, alec don and ian jarman

Evidence heard in Public Questions 192 - 246

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in private and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 7 June 2011

Members present:

David T.C. Davies (Chair)

Stuart Andrew

Guto Bebb

Geraint Davies

Jonathan Edwards

Mrs Siân C. James

Susan Elan Jones

Karen Lumley

Owen Smith

Mr Mark Williams

________________

Examination of Witnesses

Witnesses: Professor Stuart Cole, Professor Emeritus of Transport, Wales Transport Research Centre, University of Glamorgan, Alec Don, Chief Executive, Milford Haven Port Authority, and Ian Jarman, Environmental and Legislation Manager, Owens (Road Services) Ltd, gave evidence.

Q192 Chair: Good afternoon, gentlemen. Some of us know one another of old, but perhaps I might ask everyone to introduce themselves for the record. May I also point out to all Committee Members that a few people have had to give their apologies and will be leaving early? It will not in any way be an effect of the evidence we hear from you today, so please do not be offended.

Ian Jarman: I am Ian Jarman. I am the environmental and legislation manager for Owens Road Services. We are based in Llanelli with depots along the M4 corridor.

Professor Cole: I am Professor Stuart Cole, emeritus professor of transport at the Wales Transport Research Centre at the University of Glamorgan. It is interesting to be on this rather than that side of the table.

Alec Don: I am Alec Don, chief executive of Milford Haven Port Authority.

Chair : It is very nice to meet you. I was rather remiss in not introducing myself as David Davies, Chair of the Committee, and somebody who had previously had an interest in haulage.

Q193 Geraint Davies: Professor Cole, you will probably notice I have a Swansea City tie on, just to ensure that, on record, we remember the Premiership, which will be very important for bringing more traffic flows and inward investment to Wales. First, how important do you think investment in transport systems is for inward investment in Wales, in particular rail, and with particular reference to the electrification to Cardiff? Secondly, do you think the case for Swansea has been made and what difference would it make to inward investment?

Professor Cole: Thank you very much, Mr Davies. I think we have to consider two things here. One is that, as you quite rightly pointed out, Swansea is now a tourist attraction from the sports point of view and therefore we have to provide for those kinds of traffic numbers, which will be going to Swansea on a regular basis, hopefully for many years. We also have an important tourist industry in Wales anyway. I am not talking just about south Wales but north Wales. The competitive position that we have to be in is one which means that we are competing not only for tourist but for industrial investment, which is one of the primary elements in this inquiry.

Taking the position of Wales on the periphery of the European Union, we are a country in competition with countries far nearer to the primary markets of the EU-the so-called "golden banana" from Milan through Germany to the Netherlands and the south-east of England-where the wage rate is much lower. We are in that kind of competition and, therefore, our transport system has to be that much more efficient in order to compete with those countries.

Going on to your question about rail, certainly this has been one of the key elements in transport, particularly in south Wales. It is fair to say that electrification came to Cardiff with a considerable amount of struggle. This Committee has already heard evidence in an earlier inquiry about the original plan to go only to Bristol with electrification. That plan was then developed, and proof was provided that Cardiff would also justify an investment. It was not as good a rate of return as Bristol, but it was nevertheless good enough to get that decision made in a positive way.

The next stage is the Swansea to Cardiff section. I am sure that discussions are going on between the Welsh Government and the Department for Transport, probably on two things. One is the rate of return. It may be that the information that was placed in the Library of the House some months ago does not give a clear picture of what rate of return could be achieved. Certainly, Swansea now has to make a considerable effort both on the numbers side in terms of rate of return and also on the perception of Swansea as being on the edge if it does not have a rail connection.

Q194 Geraint Davies: The rate of return or the cost-benefit analysis will be done on the basis specifically of the benefits in terms of traffic flows. Obviously, there are these issues about the Premier League and future possibilities. It is chicken and egg. On the cost side, do you think there is a prospect of some convergence funding that could be applied which would reduce the cost and possibly tilt the balance in our favour?

Professor Cole: As far as I can see, it is certainly the case that the Department for Transport did not look at convergence funding as a source of funding, and therefore that would bring down the total cost. It would perhaps be useful to pursue the position. The Department for Transport now appear to be saying that they will take only those costs that apply directly to them, so if some convergence funding comes in they will deduct that from the investment amount and work out the resulting rate of return on the amount of money they have to pay net of anything like convergence funding. The Treasury do not see it in the same light; they see convergence funding as something that just comes in to fund the total amount, and I think that issue has to be resolved with the Treasury.

Q195 Geraint Davies: But convergence funding would be available only for that bit, because it is certainly not available for the English bit.

Professor Cole: But the Paddington to Cardiff bit has effectively been decided by the Department for Transport as an investment programme that they will pursue. The section from Cardiff to Bridgend in the main does not attract convergence funding but Bridgend to Swansea does.

Q196 Mrs James: We have heard a lot recently about the perception of Swansea. In a recent meeting I attended on this matter, the issue of curvy rail was introduced. I was told that the railway was too curvy in south Wales to take electric trains. I am a little sceptical about this. Perhaps you would like to comment on it.

Professor Cole: The railway is a curvy railway. Essentially, when the Great Western Railway was built to Swansea-we are going back a long way-the designs were done by Brunel. The railway originally went through Gloucestershire, Monmouthshire and then into the rest of Wales. When the railway got into south Wales, there were issues of geology or perhaps geography. The hills came down almost to the sea and Brunel had to build his railway around that. At the time local land owners very often objected, and perhaps he did not have as much influence over the land owners in Wales as he did in England. There are some very straight sections of the Great Western Main Line on the way to south Wales. Some of them were built by Brunel and some built later, but there are very good, straight sections where speeds of 140 mph are easily achievable. That is not so in south Wales with the present structure.

Q197 Mrs James: I find it difficult to believe that, given new technology and new answers to issues, we cannot address this without putting in a new straight line.

Professor Cole: The only trains that can use a track which curves significantly are trains like the Pendolinos, and even they have limits. These are trains which, if you like, tilt. For the passengers, they seem to be upright and they do not feel as though they are going sideways, but those are expensive trains and they are certainly not among the Department for Transport’s options at the moment.

Q198 Chair: That is odd, is it not? We all know the topography of Wales, but I thought that corridor in the south was not particularly topographically challenging; I thought it was basically pretty flat.

Professor Cole: It is flat but not particularly straight for a continuous period. There are certain straight bits but nothing as long as you have in England.

Chair: I admit that I had never thought about it before.

Professor Cole: Once you have a curve which reduces the speed of the train, it will not run at 140 mph but more like 90 mph.

Chair: I bow to your superior knowledge. I have never thought about it in my life.

Alec Don: I am not sighted of the technology or anything like that, but, just thinking about the issue you raise, the wire over the rail has to run in straight lines between two points and you cannot make it follow a curve. I can imagine that if the track is too bendy there is an engineering difficulty in suspending a wire over a curved track that has too big a curve on it. I do not know whether that is helpful in answering the question.

Q199 Chair: Just before I bring in Jonathan Edwards, getting away from curves for a moment, what will the respective impacts be on both you two gentlemen in your different industries? Presumably, it will be quite good for you, Mr Don, but perhaps not quite so good for Mr Jarman.

Ian Jarman: Speaking for myself, electrification will not be for freight movement but passenger movement. That is where I see electrification in south Wales. Freight movement will still be on the old-fashioned diesel line going from Port Talbot or Llanwern steelworks. I cannot see it going on to electrification.

Alec Don: As far as freight movement is concerned, the gauge of the railway is very important to us. The wagons likely to be emanating from Milford Haven will not necessarily be container wagons that require the biggest amount of space and height under bridges and so on. We have had a lot of discussions with Network Rail. I think there are a lot of train paths. You get a conflict between passenger and freight services. Passenger trains want to go at 100 mph or so and freight trains want to average about 40 mph or 50 mph. I do not know whether faster passenger trains would increase or reduce the overall freight capacity on the railway. Beyond freight, Milford Haven is an important economic area. It is important for the people working in that area to be able to get quickly to the places where they have to meet customers and so on. It is unquestionably important that the links connecting the remoter parts to Cardiff and onwards should be as fast and efficient as possible.

Q200 Jonathan Edwards: As to potential inward investors, what kind of message do you think will be conveyed in terms of the wider south-west Wales economy if electrification stops at Cardiff?

Professor Cole: I think this is a key element. The Department for Transport can look at the numbers and come up with whatever rate of return and cost-benefit ratio they can assert. Electrification is possible. Notwithstanding what Mr Don has just said, the lengths of overhead wiring are quite short so getting around bends is not difficult, certainly not for the bends on the South Wales Main Line. It is the speeds that trains can achieve. In terms of additional speed, there is probably not an awful lot of difference between bi-modal and electric, although the figures that the Department for Transport put before the House through the Library do not show exactly what that difference is. Perhaps that is a question they ought to be answering. As to perception, if you are an inward investor sitting in Spain, Italy or France and you are deciding where to invest, you look at the road network and you may have a bit of a concern about the Brynglas Tunnels, but you look at the rail network and see that electrification finishes at Cardiff. Then you begin to wonder why the Department for Transport-the British Government-have not invested west of Cardiff. Perhaps it is not worth your investing west of Cardiff. You might think that is not the way in which businesses work, but very often it is. It is a matter of, "What else is there? What facilities are there for us?"

Chair: With the utmost respect, perhaps we could try to keep the answers a bit briefer; otherwise, we will not get through much.

Q201 Mr Williams: Following on what Mr Don said in his professional role, I am quite clear about the case that Swansea is making and you make very valid points about why electrification should be extended to Swansea. You talk about perception, but what practical representations do you think are happening, and should happen, from areas in south-west and west Wales more generally to advance the case? I am aware of constituents in the south of Ceredigion who would instinctively travel to Swansea, Llanelli or Carmarthen when they are going to travel in an easterly direction. How far is the catchment area that is affected by this?

Professor Cole: If you take electrification or the improvement of the services to Swansea, Swansea’s catchment area for trains, including Port Talbot because of Parkway station, extends way beyond Carmarthen, certainly as far as the dual carriageway system is concerned. As to whether more work has or should have been done, I think the simple answer, sadly, is yes. A lot of work was done by Cardiff, Bristol, Wiltshire and Swindon in a group called the Great Western Partnership. There was representation on that body by the South West Wales Economic Forum, but clearly it was very much geared towards Bristol and Cardiff. As I understand it, SWWITCH-the South West Wales Integrated Transport Consortium-are now working on the next stage, which is to push for the electrification plan to be extended all the way to Swansea.

Q202 Mr Williams: It is very easy to make generalisations about the south-west of Wales and the west of Wales. I am convinced of that, but we need to build a concrete case about how this will benefit those of us further west.

Professor Cole: We do, and I think you will find that that is in progress at the moment.

Q203 Mrs James: Given we have now been told that at a later date they will be able to extend from Cardiff to Swansea, are you sceptical about the costs at a later stage of meeting certain requirements? Is it not best to electrify all the way now and have the cost ratio lowered, or do we take our chances and wait until some later date and it might never happen?

Professor Cole: Unless electrification is carried out continuously as one programme on that line beyond Cardiff-the same thing applies to the valley services, services in the Vale and commuter services-the costs will go up by at least 30%. If you are asking what my forecast might be-

Chair: I think that is a yes.

Professor Cole: -the answer is, no, it will not be extended.

Q204 Owen Smith: As a point of clarification, a moment ago you seemed to imply scepticism about the cost-benefit analysis placed in the Library, which says quite clearly that there would be no additional gains in reduced journey time if you had fully electric trains all the way through to Swansea. Is that because you do not understand the argument about the line speed between Cardiff and Swansea or you do not understand why the bimodal train, when in diesel mode, will run as fast as the electric mode?

Professor Cole: The simple answer is that that analysis is not comparable. The first set of analyses to Cardiff is about electrifying to Cardiff. The Cardiff to Swansea analysis is about the incremental effect. It does not indicate what the difference would be between the intercity 125 and electrification to Swansea, and what that rate of return would be, and that is the figure that is really needed.

Q205 Owen Smith: To put a very simple question, do you think that analysis was the one on which the decision was predicated, or do you think that was a post hoc justification cobbled together for the purposes of putting it in the Library?

Professor Cole: I suppose I should say that you ought to ask the civil servants in the Department for Transport. Certainly, the analyses in the two columns in that document are not comparable.

Chair: Thank you for that tactful response.

Q206 Karen Lumley: To move to transport links in general, you argue on the one hand the notion that good transport links leading to investment are not fully proven but, on the other hand, that such links are a prerequisite for inward investment. Can you explain that to me?

Professor Cole: Most companies will look at a number of elements when deciding where to invest. In the surveys which Lloyds Bank have carried out over the years transport has always been in the top four. It has never been top. Labour costs are invariably an important element, as are utilities and land cost factors, but transport has always been one of the significant decision-making criteria. I think it is a prerequisite. You cannot guarantee that a good railway network will bring investment. If there was a motorway all the way to Haverfordwest and Pembroke Dock, which I am sure Mr Don would like to see, there would be no guarantee that investors would go all that way. But without a good motorway network, which we have as far as St Clears in south Wales and as far as Holyhead in north Wales, getting that investor interested will be difficult. Therefore, it is a prerequisite, but sometimes it works the other way. Like most roads, it is two-way. It can be a good attractor for an inward investor. As we have seen on a number of occasions, when, for example, the M4/A48/A40 corridor was complete, the response of the owners of the Whitland Creamery and Carmarthen Dairy was to close them. With new methods of production and the chilling of raw milk before it goes to be processed, processing is now done in Gloucestershire because that is a good distribution point for south Wales, the south Midlands and the south-east. That is the downside of providing a really good means of moving goods for companies.

Q207 Karen Lumley: If your analysis is correct, do you think that undermines the case for investing in transport infrastructure?

Professor Cole: As I said, transport is a prerequisite for most companies. If you do not invest in good transport links, we are on the periphery and are competing with low-cost economies like Poland and Lithuania that have far lower costs. We have seen companies leave Wales and go to those countries. Without that prerequisite we are at a disadvantage. The downside risk is that some companies already in Wales will go somewhere else because they can shift their goods just as quickly.

Alec Don: Clearly, there is transport infrastructure and transport infrastructure. Road and rail are clearly very important for certain commodities, particularly containerised or roro-type traffic serving on the ferries. I would like to take a slightly broader view of transport, which is obviously about pipelines and, indeed, electricity cables. I am not sure whether real enhancement of the road and railway network will create a cluster of general industrial activity around Milford Haven, but I know that enhancement of the gas and fuel products, pipelines and electricity cables plays exactly into the equations in which the major companies which potentially will invest in that area-the Exxons, Valeros and British Gases of this world-are very interested. It would definitely make a significant difference. Dragon LNG has the scope to build additional tanks and bring in more gas and do more with it. The message that the creation of additional capacity on the pipeline might take seven years to deliver has basically made them put all their plans on hold.

Q208 Owen Smith: A general question, if I may. In respect even of that broader definition of transport, if you like, is there any obvious evidence of companies choosing not to invest in Wales because of transport infrastructural deficits?

Ian Jarman: As to infrastructure, you have the Severn bridge coming across into Wales. Tesco is moving out of Wales from Magor. One of the factors for Tesco must be the cost of the Severn bridge tolls, so the infrastructure has to be correct for the economy of Wales rather than just bringing goods out of and into Wales. It has to be the whole picture: tourism; transport; network links; and it has to be cheap. That is the big thing. We spend £200,000 a year just bringing lorries from England back into Wales. Is that justified? Why do we not base ourselves in England? We have opened a depot in Droitwich where we now see a lot more work.

Chair: That is quite worrying. Would you like to come back on that, Mr Smith?

Q209 Owen Smith: I would quite like to hear what Stuart and Alec have to say in response to the same question.

Professor Cole: I recall that the report of the Federation of Small Businesses only looked at why people came to us and why they did not like the Severn bridge tolls. The Welsh Government have commissioned another study into the impact of the tolls and queues at the bridge on inward investment. Presumably, in that report the consultants, who I think are Arup, will try to find companies that did not come to Wales. It is not inordinately difficult to do that because local authorities will have had approaches from companies over, say, the last five years. The WDA, as was, and the new Department within the Government will have had those inquiries. It may be that those companies might be asked why in the end they did not come to Wales but went somewhere else. I understand that report is to come out quite soon.

Q210 Mr Williams: You are talking generally about Wales. Quite rightly, so far, the discussion has focused specifically on the M4 corridor and also rail links. Can you break that down geographically? We do not have any fast roads and I do not have a stretch of dual carriageway in my constituency. It takes two hours to access motorways. We do not have anything approaching a direct link yet to London. Would you accept that that has impeded areas like Ceredigion and parts of the west of Wales, in particular, right along the west Wales coast, and certainly the north-west of the west coast, in terms of our economic development? We have heard about creameries in Carmarthenshire. I place on record that Rachel’s Dairy in Aberystwyth, which is now an international player, is still based in Ceredigion despite all the impediments of freight and haulage charges.

Professor Cole: In terms of the overall picture, you are absolutely right. As to Aberystwyth and the roads that lead to it-the M54, A5, A483 and, to the south, the A44- none of those is a particularly good road. The companies that have grown in that area have tended to have some local connection. Rachel’s Dairy is one; Laura Ashley is another. Laura Ashley went to Caersws because Laura Ashley liked Caersws. It was not a logical investment decision. When the Dutch company took it over, a number of those factories closed. I think that supports the argument that if you do not have really good transport infrastructure, particularly if you have just-in-time road haulage operations, which after all are 90% of total movements, companies will not go there, or, maybe when they are taken over by somebody else, an international corporation, they are going to move out.

Alec Don: Mr Smith has gone. In terms of companies that have not come forward, we have had discussions with power generators interested in biomass and those have disappeared back into the mist. West Wales is a fantastic potential location for tourism and particularly for what I term the marine leisure sector. We are there in competition with the likes of the Solent and Cornwall, and the ease with which people from Birmingham or the Greater London area can access Pembrokeshire will be a key determining factor in whether they put their boats there or somewhere else. In the wider context, you set the investment programme in roads and rail against what is happening in other countries. How visionary is the UK and Wales in terms of bridging that gap between what the private sector will happily finance, because there is a guaranteed return, and what will stimulate and drive investment? It is important for Wales to recognise that and step up to the plate wherever possible.

It is worth mentioning what has happened that is good. In Milford Haven, we have had £2 billion of inward investment over the past five years entirely financed by the private sector. Effectively, they put in their own motorway, which is the gas pipeline connecting Milford Haven to the grid. That sort of thing can happen around a port which offers all the dynamics that fit into a global distribution chain appropriately, which clearly Milford Haven does, but it is also important to lead that wherever possible.

Q211 Mr Williams: My frustration, as you will appreciate, is that in my county we do not have the benefit of the potential spin-offs from port developments and we lack that key infrastructure. You can also throw in infrastructure such as broadband or the lack thereof. We are not talking about that this afternoon. That presents companies with a huge challenge. Pembrokeshire is a very good example to cite in terms of the progress it has made and particularly the opportunities for tourism. We have not really built on the links between, say, the Midlands and Aberystwyth or Borth in my constituency in the last 100 years. There has been a rather inadequate infrastructure.

Alec Don: Yes, but I strongly believe that increasing the commutability to where the employment naturally wants to sit is important to Ceredigion. Milford Haven has the potential to be a strong centre for economic activity for all the reasons we have explained, and if it is easier for people living up towards Aberystwyth to commute down to it they are as much beneficiaries as the people in Pembrokeshire. That is where I would seek to put the emphasis.

Ian Jarman: Again, you must have the transport links to get the people from Aberystwyth to Milford Haven.

Mr Williams: Absolutely.

Q212 Geraint Davies: In your view, what should Swansea be doing to develop its port? In addition, I understand that, with European funding, there may be transnational transport funding available for this last electrification link between Cardiff and Swansea in the light of the port link on the ferry from Swansea to Cork. Mr Don, from an expert’s point of view, what more do you think can be done for Wales in terms of the port of Swansea? What should they be doing?

Alec Don: I think ports generally, generically, have huge scope to be a driver of economic activity. There is no question about that. I would almost ask the question: which came first-London or the port? You can put it in those sorts of terms. Port-centric development is very important. Swansea has its characteristics and its hinterland. For an inward investor, as often as not, the biggest constraint is how quickly he can get his project off the ground. Can you put a planning regime around that port and around Milford Haven that allows an inward investor to say, "I want to invest £1 billion. I can do it in six months in Milford Haven or Swansea. If I want to go and do it in Le Havre, I know it will take three years"? He will come to Swansea and Milford Haven. I emphasise the importance of how the ease of getting something done is ranked in the decision-making halls in the international investment companies that we talk about.

Q213 Geraint Davies: How is it ranked in Wales? Obviously, there is the Welsh Assembly Government and there is planning law, which is non-devolved. How does it rank?

Alec Don: There are two answers to that question. Clearly, in the case of Milford Haven in particular-forgive me; obviously I am from Milford Haven and I know it slightly better-we have had a good record of driving inward investment. The key factor that attracted Dragon and South Hook, in addition to the depth of water, was the availability of sites. They look at the fact that there is a jetty on the site and know they can get from A to B in planning terms in two rather than five, six or seven years, or whatever it is. We know that the potential time it will take to get a second gas pipeline-it is mooted as seven years-is definitely deterring further investment by British Gas and Dragon. It has a very critical impact on them. We have a record of success; potentially there will be more of it provided the framework supports it. The other half of the equation is about the generic reputation of living day to day, trying to operate a complex plant in an environment that is highly regulated. Can they get things done, or does the management at the facility at Milford Haven constantly have to report to the board in America that an important bit of dredging has been delayed because of some regulatory impact, or whatever is going on? On the latter point, the fact that you have a Welsh Assembly Government’s set of rules, UK rules and local rules means that it is not necessarily such a good, encouraging story, but let’s recognise that Milford Haven particularly has been successful at attracting major amounts of inward investment. That is great, and let’s try to build on that.

Q214 Guto Bebb: I am afraid I am going to drag you up to north Wales. Referring to your comments, Professor Cole, in relation to the fact that investment in transport infrastructure, particularly roads, can be a double-edged sword, to what extent do you believe that the A55 has provided a corridor of opportunity to north Wales? Has it simply facilitated people’s ability to commute from north Wales to the north-west of England? Indeed, it could be argued that the local development plans being adopted across north Wales are an indication of the fact that the Welsh Assembly Government see north Wales as a commuter area for the north-west of England.

Professor Cole: Certainly, the ease of travel to Chester and Liverpool, or the Merseyside conurbation, has made north Wales an attractive proposition for commuters for years. In the time I lived in Chester people were commuting certainly from
Denbighshire and Flintshire. The A55 makes it easy to travel just that little bit further, and of course that may have other social effects. The A55 construction certainly had impacts on local communities in that, when the old roads were there, people stopped at cafes or restaurants; they stopped for petrol. That does not happen as much any more and a number of those smaller settlements have suffered as a result. So there is that negative element. In terms of the corridor of opportunity, I think you are referring to what Peter Walker said some years ago. It was intended to be an attractor for inward investment. It did not do that in the same way. It has certainly encouraged the tourist industry in north-west Wales; it has not brought manufacturing industry, maybe because the population size was not there or companies did not think of north Wales as being a manufacturing area. But certainly it has enhanced the tourist industry and spread that further along, because people can now travel in the same amount of time a much longer distance along a very good piece of roadway.

Q215 Guto Bebb: I accept the comments about tourism, undoubtedly. The second question I want to ask is about the railway line in north Wales. We have talked a lot and incessantly, it could be argued, over the past few months about the electrification from Cardiff to Swansea. I am all in favour of people arguing their case. My understanding-I suspect that this question is for Professor Cole-is that the north Wales railway line is not particularly bendy or curvy. Having had discussions with various railway companies, it would appear that the main drawback for a faster service in north Wales is related to signalling on the line, which, in comparison with the cost of electrification, is a very low-cost solution. Indeed, I have been informed quite reliably that the people who are tendering for the North West railway franchise would be happy to provide hourly services from north Wales to Euston if the signalling on the north Wales line could be improved. Is that hyperbole on behalf of the companies or the reality?

Professor Cole: There is a lot of truth in what they say. There are two issues related to the North Wales Main Line. One is that certain sections of it are still subject to 75 mph. Companies do not like going there for up to 90 mph or 100 mph and then having to slow down; they like to keep a fairly constant speed. It is better in terms of train maintenance and fuel. That means a lot of the passenger trains are capable of doing far more than that. The 175s are travelling at 75 mph along that track. Part of that is to do with signalling. There is some track improvement to be made, but signalling is a major issue. On the calculations that I carried out recently, the North Wales Main Line electrification, which has been on the cards since 1977-I worked on it then-is £300 million. It is not an enormous sum of money. To get the journey time from Bangor to Cardiff down to just over three hours from its present four hours and 20 minutes, the total cost of the Marches Line and the North Wales Main Line-the South Wales Main Line is now being improved anyway-was about £120 million, when I made those calculations about two years ago. We are not talking about enormous sums of money to get good journey speeds on that line.

Q216 Guto Bebb: Obviously, the journey time to Cardiff is important if you are a bureaucrat or politician, but in terms of economic development is it the case that the journey time to London Euston is the one that counts?

Professor Cole: The journey time to London Euston is certainly the important one. Let’s not get away from the fact that London is a major financial centre; it is a major investment source worldwide, not just for Wales or the UK. Therefore, an important element is a good journey time to London. Electrification will improve that journey time as well as the quality of the North Wales Main Line. Similarly, a lot of the movements are not to do with just Cardiff to Bangor, or north Wales to Cardiff; there are sectional movements along that line which, again, will improve a whole range of journeys.

Q217 Mrs James: It is a well-known fact that over 1 million people live along the South Wales Main Line. Economies of scale there have given it the edge, have they not?

Professor Cole: When it comes to the cost-benefit ratio calculation by the Department, numbers of passengers are an important element, as are numbers of trains. Of course, that is what makes the analysis between Cardiff and Swansea more of a challenge than the analysis to Cardiff.

Q218 Chair: Mr Don, to move slightly away from trains and towards ships again, given Milford Haven’s distance from EU and UK markets and the competitiveness of ports like Felixstowe, how do you compete? What are your main challenges?

Alec Don: It is true. You can ask the question why the LNG terminals got built in Pembrokeshire rather than, for the sake of argument, Rotterdam with a simple pipeline under the sea. We are operating in an international competitive marketplace as a port, but that encompasses many different markets. We are not in the same container industry-driven market as somewhere like Felixstowe. If you look at Milford Haven in terms of a logistics map, it is very close to the Atlantic trade route in terms of deep sea shipping; it is about the transmission of cargoes from a wide variety of sources, such as Africa, the Middle East and the North Sea, and retransmission of processed product to other UK ports, European ports and the eastern seaboard of the United States. It is worth thinking slightly outside of the immediate Welsh boundary and in terms of that global logistics map. That is why Milford Haven is in a good location, which is driven by, it has to be said, these important pipeline links into the UK heartlands. Our business is energy. We have a fabulous natural deep-water harbour, and all those factors will combine to make it a good place for further investment by those sectors. I suspect that we will not be another Felixstowe or Southampton.

Q219 Chair: One issue that has been raised by other ports-it may not affect you directly-is backdated business rates on businesses within the curtilage of a port. My understanding is that, in England, the Government decided that they could not possibly backdate rates because it would be unfair to businesses that had not built in those costs, but the Welsh Assembly Government have decided to do so. A number of businesses based within the curtilage of a port authority are now faced with a whole load of charges that they never faced before. Broadly speaking, is that correct? What opinion, if any, do you have of this?

Alec Don: For me, I think the most important factor is that businesses in Wales have the opportunity to be treated in the same way as businesses in England. If the rebate has been made in England, it should probably be made in Wales.

Q220 Chair: Are you aware of this happening in Milford Haven?

Alec Don: Some businesses are affected. I think that in the grand scheme of things probably for us and our client or tenant businesses, the impact has not been particularly significant, but it is a shame that the Welsh Government received money from UK central Government to deal with the issue and decided to use it for other purposes.

Q221 Chair: The UK Government gave the Welsh Assembly money and said, "This is your money to prevent you from having to put a charge on Welsh businesses."

Alec Don: Not for ever and a day but to deal with the backdated element that they would be faced with.

Q222 Chair: They said, "Here is money which is given to you specifically so that Welsh businesses will not lose out in comparison with English businesses", and the Welsh Assembly Government spent it on other things.

Alec Don: Yes; that was exactly what happened. That is a fact. I guess that, much like the discussion about the extension of the railway to Swansea, there is a value calculation about what, for the interests of Wales, is the best way to use that money. I think it was in that context that there was some evaluation of it, but essentially the facts that you relate are correct.

Chair: Would anyone else like to come in with any questions about shipping and ports, given that some of those who were going to ask those questions have had to go elsewhere?

Q223 Mrs James: We have had evidence previously from Associated British Ports that ports are more than simple transfer points for goods, ships and things on to the road; that they are multi-modal hubs. There is a good connection with rail and roads. You may have realised I am a little interested in rail.

Alec Don: Yes.

Mrs James: These are backed with very good statistics. We need to develop storage and sites around it. Can you give us a better picture of what that would actually mean? What would we need to do in Wales for that?

Alec Don: My personal view is that, in policy terms, it is worth defining ports areas as areas where you can get things done quickly and investment is directed. One of the reasons I say that is that transport networks are about commutability and the efficient movement of goods. Manufacturers never want to be located off route for what is the main source of supply and main market for their goods. If you have them off route, you are building in £1 or £2 a tonne deviation costs. That will steadily undermine an entire industry. They want to be close to these points of interchange, be it ports, motorway junctions or airports. This is the essence of what I say. I think ABP also say very well in their submission that it is worth seriously backing a port-centric approach, an airport-centric approach and perhaps even a motorway junction-centric approach-but I am a port guy, so a port-centric approach-to the question about ease of planning and definition of sites. As well as transport links, good sites are very important.

Q224 Mrs James: One of the things that I come across-I tell you because we have a port site in Swansea and it is near me-is a dichotomy with development for leisure and tourism. How do we maintain those areas of industrial activity, yet all see a better standard of living, better housing, etcetera?

Alec Don: To a certain extent, the market will have its way whatever you decide. In policy terms it will go where the market wants to go. I would, broadly speaking, encourage the decision makers to say, "If that is what you want, that is what we will support", because ultimately how fast you can make things happen is a key determinant of how much investment you get. That’s it. I come from Liverpool. Perhaps it is worth talking for a second about something that is completely outside Wales. Technology changes. The central part of Liverpool was where the port was. It dealt with ships whose depth was about five or six metres. Ships get bigger and bigger and you build more and more deep docks that go out towards the sea, and the shallower ones fall off being economically useful as ports and get turned into flats, offices, shops and so on. That’s fine; the world changes. I think it is very important to back that process and see the new money going in wherever it wants to go.

Q225 Guto Bebb: On the issue of ports as a natural hub for economic development, obviously in north-west Wales we have the transport links heading towards Holyhead, which is a gateway to Ireland, but the transport links are predominantly passenger transport rather than commercial. Do you think that the concept of an enterprise zone located on something like Holyhead port has merits? Is that enterprise zone-type approach one that Milford Haven has considered in any way?

Alec Don: Yes, I think it does have merit. Whoever has that site will have to work up a plan that attracts someone to that site for the merits it offers. It might be depth of water; it might be proximity to a particular trade route. If it does not tick any of those boxes, he really is proverbially pushing water up hill, but from a policy point of view you have to support him in the effort. It is a key site. There is talk about the installation of an undersea electricity connection essentially from Anglesey right the way round to Milford Haven to connect to the Pembroke spur. That would be a fantastic thing to do. It would create a ring main and you would immediately have a much higher utilisation of the electricity grid capacity. You could put biomass power stations anywhere on that ring main and it would feed into Cardiff, Swansea and the rest of the UK in a way that had lower logistics costs and used bigger ships and the existing berth infrastructure more intensively. I do not know whether that is the story that the market will eventually buy, but by all means it is absolutely right to back it, focus on that site and say, "What can we do with it?"

Q226 Jonathan Edwards: Building on that slightly, ports policy is essentially a reserved matter for the UK Government, yet access to the ports is a devolved matter. In your view, do the UK and Welsh Governments work well together to assist inward investment?

Alec Don: My answer to that is yes, broadly speaking. They all have a common policy objective of stimulating growth. We are in an economic environment at the moment where we want to stimulate growth and investment, and that is very important. Our instructions-we are not a devolved matter-from the Department for Transport is to get on with growing the business on a commercial basis, and they will back whatever we have to do in that respect. The Welsh Assembly Government have exactly the same objective. Milford Haven, as a port, at certain times delivers up to 30% of the UK’s instantaneous gas demand. All the assets there collectively are a phenomenally important installation. I do not see a particular conflict in any of that. At the micro level, we would be concerned about whether a unit like the MCU, which is our consents unit for certain licences to do with the disposal of dredged material, might charge higher fees than the English equivalent, which clearly would disadvantage Wales. There are little concerns like that about the interaction between the UK and Welsh Assembly Government, but in terms of the big picture I do not see a particular problem.

Q227 Jonathan Edwards: Any there any specific joint forums?

Alec Don: I think the short answer is that I spend quite a lot of time talking to both of them but not conveniently in one place. A lot of effort goes into building up things like the Wales marine spatial plan and the Wales regional plan working from a UK top-down approach. They spend a lot of time trying to integrate those things. Those sorts of documents are really useful as long as the attitude of the political leaders who manage and control the impact of the bureaucracies, if I may call them that, on the operation and development of the ports is as conducive as it possibly can be. Fundamentally, if we have a customer, a financier and a site all lined up and we have to wait for five years for a consent, or we have to get 10 different types of consent in terms of licences and so on, you just cannot hold the equation together. It is like the man from Del Monte. The Government is the man who says yes. If we have got all those things together, broadly speaking it makes good sense, and you can get a single decision as quickly as you possibly can, investment will happen and it has happened.

Q228 Jonathan Edwards: As part of this inquiry we went to Germany and had a meeting with UKTI. In their promotional material they do not include infrastructure as a reason for investing in Wales because they deem it to be so poor. Does that surprise you?

Alec Don: I am looking at it through a particular lens quite a lot of the time in so far as I am very focused on the energy sector, and the infrastructure for us is pipelines, electricity grids and our deep water. We also have a ferry service and the opportunity to try to stimulate a ferry service that connects Pembroke Dock with Spain. Those kinds of incremental improvements would be great. Once you have a node of interchange of commodities on ro-ro services you might see some value-added services coming into the area, such as warehousing and RDC-type activities, and it might develop from there. But we are working on projects that may very well lead to making a greater demand on the railway. When we are talking seriously to the market that might want to use those services, they will be asking questions. How many paths are there? How fast will the trains go? What will it cost me? Can I get a train to turn around between Milford Haven and Crewe once a day, or will it be one-and-a-half times a day? If it is one-and-a-half times a day, it is just not going to stack up. You see the approach. As soon as you get into those sorts of discussions, the level of infrastructure available in Wales will be very critical.

Q229 Chair: Mr Jarman, what would you say? Do you think the level of transport infrastructure, which we are thinking of here primarily, is something that we should be boasting about or keeping quiet about?

Ian Jarman: We have two trans-European networks which link Ireland, Wales, England and Europe: the A55, which is predominantly dual carriageway with the exception of the Menai bridge area, and the M4, which is basically dual carriageway to St Clears. St Clears is not the best road; it is not the worst road. But you will not get people to invest around Milford Haven because the reliability of the road network isn’t there. If there is an accident, there will be long detours to move your goods and people and get your staff to work. I mentioned in my submission the closure of the M4 twice. That hit us extremely hard and cost £20,000 on both days that the M4 closed. For a family business in south Wales that is big money.

Q230 Mr Williams: That leads on to my questions. Do I detect, therefore, a slight note of irritation that the debate to date, perhaps even this afternoon, has focused largely on rail, understandably? I don’t deflect from my prejudice on Swansea. It is quite right that they should raise it; I agree with them on that matter. But a big debate needs to be had about investment in road. I suppose that the question I am leading to is: do you believe it would be more cost-effective to enhance investment in roads rather than rail?

Ian Jarman: My opinion and my answer would obviously be that Wales is a just-in-time manufacturing base. You cannot do just-in-time delivery on a railway network; it just does not work. Just-in-time has to be by road, having regional distribution centres and shipping the goods out by HGVs. There is a severe lack of investment spurring off the trans-European networks up in the north and in the south. There is not enough road going north.

Q231 Mr Williams: We will come on to the middle in a minute because there is a particular interest there. Do you know of inward investors who have been dissuaded from investing in the country or have voiced concerns because of those difficulties?

Ian Jarman: I was asked a question when the First Minister for Transport, or whatever his title was, announced that the M4 relief road would not go ahead. It was just after Amazon had come to Swansea. One of the questions I was asked by the CBI was whether I thought Amazon would have located in Swansea on the basis that they would not have that relief road. All they want is a reliable road network to ship their goods to the Midlands and towards London from their Swansea distribution centre. I would say that investment in road infrastructure has to be taken into consideration for locating any inward investment.

Q232 Mr Williams: Professor Cole, what do you think about that?

Professor Cole: Ninety per cent. of freight goes by road. Many people might think it is wrong but that is the reality. Therefore, if we are going to be competitive on the edge of the European Union we have to have a really good road network. As we have seen, Amazon have come to Swansea; Macmillans have just moved from Basingstoke to Skewen. They already had a small distribution centre at Skewen; now their main distribution centre worldwide is there. Clearly, they think that the M4 motorway is adequate for their distribution. To some extent, we are investing in the right way. I am sure that Mr Williams would like to see more investment on the A44, maybe an extension of the M54 westward, but the reality is that Governments have to look at where the most likely impact will be and therefore concentrate on those areas.

Q233 Mr Williams: I was going to come on to prioritising. In the context of shrinking infrastructure budgets there is inevitably a need to prioritise areas of particular investment opportunities. But you would accept, though, that those of us in mid-Wales have particular challenges and difficulties on which we touched earlier. I am quite aware of them; I get the business people coming to my surgeries and talking about them. What is your perception of the problems we face not just in the road infrastructure but, to digress a bit, on the railways? The fact is that we do not have a direct service from London to Aberystwyth. If you look at a map, that is one of the few peripheral areas that do not have that. I hope that Arriva Trains will make some progress on that in due course, but these are big problems for us, are they not?

Professor Cole: They are. To take the road network first, clearly in terms of prioritisation any Government will go for those investments which will give them the biggest rate of return, and that is what they have done. The Welsh Government is the responsible authority for roads in Wales. To go back to Mr Edwards’ earlier question, where they can get co-operation with the Department for Transport, some years ago we saw issues to do with the construction of the A55 and the ongoing problem with the A483, which comes into England as an unimportant road but in Wales is a trunk road. Of course, that has an impact on mid Wales. As an economist, I am sorry to say that prioritisation is almost bound to be based on the cost-benefit ratio. What returns will we get in terms of employment? What numbers of vehicles will travel on those roads? Consequently, the big investment will be where it is from. There are discussions about the A465. Clearly, that is an important road. Again, it has more of an impact on south Wales than it does on mid Wales, although one could say that there are roads in mid Wales that could go on to that road. It is dualled for part of the way. There is an expensive job to be done at Clydach Gorge, and that would make it a good road into the Midlands. It would not give best impact certainly on the western part of the canolbarth or mid Wales. It would have a greater impact on the Brecon area more than the western section, but almost inevitably we will have an investment prioritisation in roads across north and south Wales.

In terms of rail, the Aberystwyth to Shrewsbury line now has capacity for an hourly rather than a two-hourly service. With the demise of the Wrexham and Shropshire private railway company, they are now part of the same group as Arriva. The Deutsche Bahn company that owns Arriva might well decide that this is perhaps a good opportunity to introduce a commercial service giving access to the network from Aberystwyth to London. That was what Arriva had planned to do some years ago.

Q234 Mr Williams: In one of your earlier answers you talked about the importance of perception. That is linked to what Mr Don said about Pembrokeshire and the ease with which people could get about. Mention was made of Crewe and all the rest of it. That perception is important. That is what we are lacking at the moment. I do not doubt that very few business people will want to do a daily trip from London to Aberystwyth, but it is a strategically important area; it is a university town; it is a tourist centre of growing importance, and we need to enhance that.

Professor Cole: One thing about which we have to be clear is that the Aberystwyth to London service is not doing only that job. The Holyhead to London service has a lot of intermediate changes of passengers. For example, Chester and Shrewsbury are important centres. It is not just thinking about how many people travel from Aberystwyth to London but how much business can be generated along those different and important sections of that route, which of course goes through parts of England and therefore will stop at certain stations. You are absolutely right about the perception. The perception is that aberystwyth is difficult to get to by train. If you are talking about it from a railway perspective, it is difficult to get to. It is a two-hourly service, and it makes little sense for anybody to use the train other than for casual, leisure or maybe student journeys because no car is available. To get people to shift from car to train and for Aberystwyth to be, if you like, in people’s perception a connected town by rail, then an hourly service at least is essential and those trains need to be of good quality of the type, perhaps, that Wrexham and Shropshire were operating.

Q235 Chair: I am going to come up with a bit of controversy here just for the fun of it. I have often heard it said that Aberystwyth, Monmouth and all sorts of very nice but small places that are hard to get to ought to have absolutely first-class rail links or whatever, but is not the reality that some people like these places precisely because they are out of the way and a bit hard to get to? If they were within a two-hour commute of London, they would become the new Readings or Swindons, would they not, and we would be paying rather a lot of money for something to happen which many would not want? I am playing devil’s advocate.

Alec Don: People are brought up in areas and they want to live there. Sometimes they just cannot because there aren’t the jobs there. What is really important, perhaps a little more so than how we can create a rail service that is on the very margins of profitability for an operator, is the creation of good IT infrastructure. What is it that people in somewhere like Aberystwyth have, because it will not really be on a central route for manufacturing or logistics of goods in terms of RDCs or warehousing? It will never quite fit that sort of profile, but does it have the skills base? That is a very important part of the infrastructure of a place like Aberystwyth and the ability of those people to communicate and work in this ever-more IT-connected remote working world with the rest of the planet. The traditional themes of road, rail and so on are important sector by sector and activity by activity in different ways. In Milford Haven, what we are interested in is not rail services that can carry containers but pipelines and electricity grid connections. That is one of the things that will drive our business. I am sure that Aberystwyth has to be interested in really good IT connections and selling on its skills base. You get different answers in different places, but I think the overriding theme in each area is to concentrate on what it is good at, not try to disperse activity away from where it is already successful.

Q236 Geraint Davies: When my father was a boy in Aberystwyth, two or three trains a day carried tourists from the Midlands. Obviously, now people go to Spain and all the rest of it, but at that time an enormous hub of people were feeding that economy. Given the points Mr Don has made about technology and that Aberystwyth is a nice place to live, if there was that speed of connection, more and more people who perhaps went to the university there would stay there and set up their IT businesses in the knowledge that if they wanted to go to London they could, but at the moment they cannot. More people are looking for environmentally sustainable holidays rather than getting skin cancer with climate change and all the rest of it, and perhaps people from America want to go round castles or whatever it is. Unless we have that infrastructure to support modern international tourism with people living longer and all the rest of it, Aberystwyth will have a big problem, but if we provide infrastructure, we might also provide the demand that justifies it.

Alec Don: You have to put it together with sites. You could build a really good service to Aberystwyth, but what is at the end of it in terms of hotels, other activities and, in our case, marinas? There has to be a bit of a plan around that to get from point A to point B over a two or three-year programme. The other very important thing is to have local ownership of the businesses in areas like that. The people who want to stay in Aberystwyth are, I presume, those who own businesses there.

Q237 Mr Williams: You have responded to references to Aberystwyth. The simple fact is that we have the highest proportion of small businesses per head anywhere in the United Kingdom; we have a university town with a high skills base; we have huge tourist opportunities; and, above all, if you put them all together, it is about an economic imperative now. The fear is that those opportunities cannot be realised to their full potential without those links. On many occasions I have come across examples of American tourists who want to come to the west of Wales but are put off, quite frankly, by having to mill around the dreaded Birmingham New Street station for some time waiting for a train connection and then having a shambolic service to get them to the west of Wales. That is not the way we are going to promote it. I think that requires immediate action. I am sorry; there was a question. Mr Jarman and Professor Cole enlightened us on many of these things before. You have reiterated some of the very important messages, but particularly some of the experiences in terms of road freight and the difficulties that you and other companies have had in mid Wales.

Ian Jarman: We operate a pallet network service from Llanelli as far as Aberystwyth.

Mr Williams: You do not have to restrict it just to Aberystwyth; we have heard a lot about Aberystwyth this afternoon.

Ian Jarman: That is our boundary. We cannot send an articulated lorry to anywhere other than Pembroke Dock and Milford Haven because it just will not get through the narrow, windy roads. The road infrastructure is not in place there for HGVs, not that you would want them trampling up the coast from Newquay to Aberystwyth, but the road network is not there for you. You need a good route, whether it is an upgrade of the A44 or something coming up from St Clears. I do not have the answer to that, but we cannot operate HGVs deeply into west Wales because the road infrastructure is just not there.

Q238 Guto Bebb: Obviously, we appreciate that 90% of commercial traffic will be on roads rather than rail, but to what extent are Welsh haulage companies looking at integrating with rail transport?

Ian Jarman: The only real option at the moment is the rail freight terminal at Wentloog. We do not go into Wentloog purely and simply because the money is not there for operations. It is a very cut-throat market and they work on extremely low margins, even lower than those on which we are already working, so it is not a market we have even tried to tap into.

Q239 Guto Bebb: My second point relates to the constituency that I serve. I have a quarry next to the A55, but predominantly that uses the rail infrastructure to transport its product which is basically low value hardcore. Is there a level at which the price per tonne of a product becomes uncompetitive to transport by road?

Ian Jarman: In response to that, there are hauliers out there who would undercut and do it below cost price at the moment purely and simply out of desperation.

Guto Bebb: The point I am trying to make is the fact that that quarry is next to the A55 but it needs to access the rail network.

Ian Jarman: Are they using the railway to ship their goods?

Guto Bebb: Yes.

Ian Jarman: Where do they ship their goods?

Guto Bebb: To the Manchester area. What I am getting at is that there is a possibility of developing quite significantly the market for slate waste from Blaenau Ffestiniog, for example. That is being stopped by the fact that the road network is so poor that you cannot get heavy goods vehicles up to that part of the world. Is that the type of context where the railway which is already in place is an option that should be looked at, because road transport would require a huge investment right through the heart of Snowdonia, whereas the railway lines are already there? The point I am getting at is that perhaps it is not always the case that the road transport network is the way to go.

Ian Jarman: It is an option. I am from the road haulage industry, so I would always say that the road haulage industry is the best method of transporting your goods because it gets from A to B and you do not have to have large quantities of it. You can send it out in a convoy of one lorry or 50 lorries if you want to.

Q240 Guto Bebb: But the specific point that I am getting at is the low value of the item in question. I come back to the question: if the value of the product is comparatively low, is there a cut-off point where road transport is not competitive, apart from in the midst of an economic recession such as we currently have?

Ian Jarman: It all comes down to the volumes you are shipping.

Q241 Chair: As a former hauler with an HGV, perhaps I may ask some quick questions. We are running a bit short of time. Would you like to see weight limits increased? Is it now 44 tonnes?

Ian Jarman: It is now 44 tonnes. We have the DfT consultation on longer semi-trailers with no increase in weight. We will max out on weight before we cube out on volume for the majority of the product we carry for our diverse customers. We do carry for Georgia- Pacific tissues and toilet rolls where longer semi-trailers would work. Again, the road infrastructure is not really built for 54 or 58 tonnes.

Q242 Chair: It would be all right on a motorway, would it not? It would work on a motorway.

Ian Jarman: But those roads off the motorway from your distribution centres would have to be upgraded, so it is a cost.

Q243 Chair: Is it a problem for you that foreign drivers are breaking tacho rules and the rest of it and then do not even bother to pay fines, and as a respectable company you find it hard to compete with that?

Ian Jarman: Through the trade associations we have lobbied hard for VOSA to have better stop and on-the-spot fines. It is getting better. It is not perfect at the moment. There are a lot of unscrupulous foreign counterparts out there who do illegal operations through cabotage. They carry excessive weight; they drive beyond their hours; they do not take the required breaks set out in the European regulations.

Q244 Chair: I do not know whether it is still the case, but years ago it was difficult to pick up back loads from abroad if they were not coming back to the country of origin. Therefore, you could not pick up in Italy and drop off in Germany. Is that changing now because we are all in the European Union? It may not be something that affects your company.

Ian Jarman: Not as a company. We do very few European movements now. We used to have a European department that was a European department, but we probably do one European transaction a month. What we have seen of late are vehicles being impounded by VOSA or stopped. VOSA stop the foreign drivers. All they are doing is winding down their windows by two inches and passing the credit cards straight out of the window. They know it will be a £200 fine. They park up for nine hours and they are on their way.

Q245 Chair: Lastly, do you have concerns about the standards of rest facilities for HGV drivers?

Ian Jarman: Yes. There is a lack of UK Government and Welsh Assembly Government thinking on rest facilities. Every driver after four and a half hours must take a 45minute break; after nine hours the driver must park up for a daily or nightly rest of nine or 11 hours. Load security is a major factor where you park. We are very fortunate in that we offer other UK hauliers parking facilities and they offer them to us, but facilities around the UK are not good enough and are very expensive.

Chair: I think this will be the final question, hopefully, on trains again.

Q246 Mrs James: It is about freight as well. Mr Jarman has already picked that up. Basically, will electrification work for freight? We have heard conflicting information on it that most providers in Wales are very reliant-and quite happily reliant- on diesel.

Professor Cole: I think the issue is for some of the very big operators. I am sure that Ian is not going to agree with this. We have a large company called Tata Steel which is manufacturing in Trostre, Port Talbot and Llanwern. The issue goes back to Mr Bebb’s question. Where does rail work for freight, for example? It works where you have a siding at either end, direct deliveries and you do not have to transfer to road because that incurs a cost. With electrification, the benefit to Tata as a user of the railway at the moment is that they do not have to change from diesel to electric. It would not be at Cardiff but it would be somewhere on the Cardiff to Newport main line. They would have to attach an electric locomotive. If they could run straight on to the electric main line not at Llanelli but Port Talbot and Llanwern, that would be an advantage to them, in that they would not have that extra cost.

Mrs James: They have supported the electrification to Swansea; they have been very supportive.

Professor Cole: Yes.

Chair: Gentlemen, thank you very much indeed for coming along.

Prepared 14th July 2011