Posted 28th May 2012 | 3 Comments

Freight group sounds warning about reforms

THE RAIL FREIGHT GROUP is urging the Office of Rail Regulation to think again about its proposals for freight charging, which it fears could damage the sector and divert some cargoes to other modes.

The propoposals are outlined in the recent ORR consultation document ‘Periodic Review 2013; Consultation on the variable usage charge and a freight specific charge’.

The RFG has told the ORR: ‘We presently have significant concerns that the proposals as set out could have major repercussions for the stability of rail freight, for investor confidence, and for the prospects of continued growth’.

The ORR is proposing to levy an additional charge on operators moving power station coal, iron ore and spent nuclear fuel, which could amount to an additional £60 million a year. It suggests that this could lead to a reduction of at least 10 per cent in those sectors.

There may also be different charges for various geographic areas, as well as for each locomotive and wagon type, and introducing 'scarcity' or capacity charges.

The RFG said the ORR 'may be giving undue weight to its duty to have regard to the funds available to the Secretary of State, perhaps at the expense of the duty to promote the use of the railway for the carriage of passenger and freight, and the duty to enable companies to plan their businesses with a reasonable degree of assurance'.

RFG Chairman Tony Berkeley added: "The rail freight sector has been growing successfully in recent years, and customer and investor confidence is strong.  These proposals risk destabilising this, and turning customers back to road, with its simple and straightforward pricing structure.

"Why does the ORR believe that causing a 10 per cent drop in traffic complies with its duty to promote rail freight? ORR needs to look for different ways of achieving its objectives that are less damaging to rail freight operators and their customers”.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Derek Porter, Edinburgh

    It would be a retrograde step if those charges were to be introduced,we need more freight on rail and a better integrated road/rail system with more hubs/distribution points,this would make transporting goods and fuels more efficient,what I would suggest are dedicated freight lines,this may mean running parallel with current passenger lines and having to widen 2 lines to 4 etc,but the cost savings will be worth it.
    As for governments trying to reduce coal fired power stations and use of coal as a fuel source,sorry,but it is very short sighted when we can't properly dispose of nuclear waste,or use nuclear power and those wind turbines aren't the answer,they need a diesel generator to start them off,and they are limited to how many revs per minute they can do due to voltage. Otherwise if there is a strong wind,they shut down and if shut down fails,they continue to generate but over volt bursting into flames and making it an expesive morsel to replace,they are far from environmentally friendly.

  • andrew ganley, sutton

    The sole reason behind this stupid idea is to get rid of coal fired power stations,without any regard to new ones,when will this government stop worrying about carbon emissions and green house gases,the Yanks dont and neither does anyone else.

  • Philip Russell, Carlisle

    I tend to agree with the rail freight group ,making the charging system much more complex and expensive without serious thought is only going to help its rivals in the freight transport sector,although im sure in certain parts of the network passanger train operators will be only too happy to rid themselves of freight trains getting in their way.