Select Committee on the Crossrail Bill Minutes of Evidence


Examination of Witnesses (Questions 8680 - 8699)

  8680. MR ELVIN: There were certainly ample members of the freight industry present. I may be wrong. I do not see anyone listed.

  8681. LORD BERKELEY: Mr Bennett, our next witness, definitely was there and it may be that another member of the FTA staff was there as well. Mr Bennett can certainly answer questions if it is about that particular day.

  8682. MR ELVIN: So far as the hearing before the ORR is concerned, presumably your Association is satisfied that the freight industry set out its concerns at that hearing?

   (Mr Hookham) We believe the freight industry's concerns were set out, and we are pleased with the response of the ORR. I think it is important that those are cemented into the Bill to ensure that the security and guarantees that I was referring to are actually there.

  8683. It is right, is it not, that the FTA did not make any representations—I know others did—to the ORR after the provisional decision was given on 3 March?

   (Mr Hookham) Only to welcome them.

  8684. You did not think it necessary to raise any further matters, having seen the provisional decision?

   (Mr Hookham) Not pending this hearing and this evidence.

  8685. Lord Berkeley has said and, because you are appearing under the umbrella of his representation, I assume you agree that full compliance with industry processes which are fair and transparent are welcomed?

   (Mr Hookham) Absolutely.

  8686. Therefore I assume you would not favour a situation which did not lead to full compliance with standard industry and regulatory processes?

   (Mr Hookham) Indeed.

  8687. It is fortunate, I suppose, that today we find ourselves much closer together on those issues than we did two years ago?

   (Mr Hookham) Indeed.

  8688. MR ELVIN: Thank you, Mr Hookham.

Examined by THE COMMITTEE

  8689. LORD JAMES OF BLACKHEATH: You have talked of the significance of the increase in the height of containers from eight foot six to nine foot six, yes?

   (Mr Hookham) Yes.

  8690. How far does that now represent a European standard, and is it compatible with what is coming from the Eastern European countries, which must presumably be introducing some new factors for you?

   (Mr Hookham) Further witnesses can confirm this, but I believe it is the preferred standard that new containers are designed and built to because of the high cubic volume that they are able to carry. It is a trend which is well established and is expected to continue.

  8691. CHAIRMAN: Thank you very much, Mr Hookham.

The witness withdrew

  8692. LORD BERKELEY: My Lord, my next witness is Alan Bennett. My Lords, the Committee has heard about the importance of freight in general and from the representative body of freight customers; it is now time to discuss rail freight in particular. I will now call Alan Bennett, Director General of the Rail Fright Group.

MR ALAN BENNETT, Sworn Examined by LORD BERKELEY

  8693. LORD BERKELEY: Mr Bennett, could you give an outline of what the RFG is and your experience?

   (Mr Bennett) I am Alan Bennett. I was appointed Director General of the Rail Freight Group in June 2007; I have over 20 years' senior level experience of the rail freight industry and the rail freight market in Great Britain and the European Union. The Rail Freight Group is the representative body of the rail freight industry in Great Britain. We have over 160 members. Our members, as Mr Hookham described, range from freight users such as retailers and manufacturers, through shipping lines, and the rail freight operating companies themselves, the operators of major transport infrastructure facilities such as ports and major inland terminals.

  8694. Can you give the Committee a brief background to rail freight in the UK? I suspect that they are all familiar now with passenger services one way or another, but not all familiar with freight, and stressing the difference between the two?

   (Mr Bennett) In effect the Government awards passenger franchises on a time-specific, route-specific basis with protection from competition, moderated in some cases. The model chosen for the rail freight sector was an industry model that actually encouraged competition on a network-wide basis and encouraged market entry. It did this through creating an open access regime across the British rail network and into major freight installations and terminal facilities; it did it by creating a transparent and open timetabling process; a comprehensive network code that governs the relationship of all rail freight existing operators and new operators to Network Rail and to each other; and it created transport disputes resolution and arbitration process, all of which responded to an independent, economic regulator.

  8695. Has the model been successful? Perhaps we could have slide 5, please.[5]

  (Mr Bennett) On many criteria the rail freight model can be seen as successful. There has been a 60 per cent growth in tonne/kilometre (tonnes carried multiplied by distance moved) since rail freight privatisation. That does not simply reflect the growth in the total market, it reflects an increased penetration of the road and rail market. Before privatisation rail market share was around 8 per cent; currently it is around 12 per cent and is rising. Competition and investment in new and more productive equipment has driven down prices. Service quality has been greatly improved. On customers' own measure of their required service quality, freight operating companies are regularly delivering 98 per cent performance.

  8696. Rather better than passenger services deliver?

   (Mr Bennett) I would not comment. What I would say is that because the procurement of freight transport is an industrial process, the criteria on which freight transport decisions are made are price competitiveness, reliability and transit time. The increase in market share that I have just described reflects, as I have said, improved price competitiveness, greater productivity and greater reliability. That has been facilitated by over £1.5 billion worth of private sector investment in the industry, principally in rolling stock but, also, in terminal facilities, IT systems and in ancillary facilities.

  8697. LORD BERKELEY: So, Mr Bennett, what is the expected growth in rail freight traffic? We have seen some figures from Mr Hookham on previous slides.

  8698. LORD JAMES OF BLACKHEATH: Do you have a definition, please? I am sorry, I am trying to understand—this is not easy. A tonne/kilometre: is that arrived at simply by multiplying the tonnage by the distance it is travelling?

   (Mr Bennett) It is, my Lord.

  8699. Is that really a significant factor? Presumably, that is what you charge by—the tonne and the kilometre distance—but is it the most significant measure of growth and impact?

   (Mr Bennett) It is not necessarily the basis on which transport is charged. It clearly is one of the elements that goes into the price that is negotiated—



5   Committee Ref: A52, Rail freight since privatisation (LINEWD-34_05-006) Back


 
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