FTA to policymakers: Proposals would force customers to abandon rail

FTA to policymakers: Proposals would force customers to abandon rail    The Freight Transport Association, which represents British shippers and logistics companies, is worried that suggested proposals from the Office of Rail Regulation (ORR) could see customers switch from using rail to trucking.
   ORR is undertaking the Periodic Review of Charges for 2008 and will report its recommendations to transport ministers in February.
   According to the FTA, there are no firm proposals on the levels of charging, but suggestions have been in the order of a rise to '130 million ($245 million) per annum, from '100 million currently. In addition, proposals suggest the charges for freight-only lines paid by the Department for Transport would fall to the freight operators, resulting in an almost 10-fold increase to a potential '120 million ($226.2 million), the FTA said.
   “ORR appears to be approaching the issue of network charges with no consideration that rail freight operators must compete against other modes,” said James Hookham, the FTA’s deputy chief executive.
   “Increases in charges to freight traffic as outlined in ORR’s proposals would have a devastating impact upon the industry. If it is beyond ORR’s remit to consider factors outside the rail network then FTA looks to the government to honor the commitments made in its statement to Parliament in July 2005 which indicated encouragement for the growth of rail freight.
   “Rail freight has a critical role to play in the U.K.’s economy and a major contribution to make in reducing CO2 emissions in the future. But the margins are slight, and if we start seeing charges of the order being discussed by ORR then it is unsurprising that customers would be discouraged from using rail, or worse still that existing rail customers will move back to the already congested roads,” Hookham said.
   The FTA said that operators and customers alike are baffled why the review is taking place at all as the freight charges were last reviewed in 2001 when they were supposed to be set until 2012 unless there was material change in circumstances.
   “Never mind the value of the charges,” Hookham said. “The industry needs certainty in the charging regime. If customers can’t be sure what the costs of rail are going to be five years hence, they are not going to be prepared to make the necessary infrastructure investment required to make use of the benefits in speed and service reliability that rail should be able to offer.”