Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Memorandum by the Joint Local Government Channel Tunnel Initiative (RI 15)


  The Joint Local Government Channel Tunnel Initiative is a grouping representing local authorities throughout Great Britain, with members from all the constituent organisations involved in the subject (the Local Government Association, the Convention of Scottish Local Authorities, the Welsh LGA, the Association of London Government and the Shires Public Transport Consortium). The Initiative was originally formed some years ago to press for regional services through the Channel Tunnel and came together again during 1998 in the light of the difficulties then occurring.


  During last year the Initiative examined the issues arising from London & Continental's problems and following discussions with Ministers resolved at that time to support the Government's stance as most likely to result in Phase 2 of the Channel Tunnel Rail Link (CTRL) being completed (but see below). However, members remained concerned about the short term prospect for train services between the regions and Europe, and were pleased to have the opportunity to make their views known to the Arthur D Little team during their study.

  The outcome of that work has proved a major disappointment to the Initiative. In our evidence to the Committee in respect of the Railways Bill, we suggested that the duty on the Strategic Rail Authority (SRA) to provide for through services to the regions should be strengthened and we were pleased to have the Committee's support for that stance. Again, however, the Transport Bill had been disappointing in repeating the weaker position set out in the Railways Bill.

  We are certain that evidence will be put to the Committee on this point by the Fast Tracks to Europe Alliance, with which the Initiative is linked, and we will not therefore repeat the arguments here. We would however ask the Committee to reassert the position it took in its original conclusions on the provisions of the Railways Bill.

  In terms of progress with the Channel Tunnel Rail Link itself, it is most disappointing that Railtrack has not committed itself to purchasing Section 2 of the CTRL and ensuring that the direct links from the CTRL to the West Coast, Midland and East Coast Main Lines are built so that the benefits of the CTRL are capable of being spread to the regions. Although the Government has given Railtrack until mid-2003 to decide whether it wants to complete the CTRL, in view of Railtrack's performance to date, there may now be a case for Government to take over the responsibility soon after the track access review is completed, later this year.


  During the Initiative's researches, it became apparent that a major issue likely to affect the future of through trains, particularly for freight, was that of the capacity of the network to handle additional traffic, particularly north of London, both in the short and in the longer term. The Initiative thus turned its attention to this linked question and met the main players involved (Railtrack, English Welsh and Scottish Railway and Freightliner). We drew the conclusion that a serious problem was building and, given that Railtrack's past performance in developing the national network has been disappointing, its plans set out in its Network Management Statement (NMS) in March 2000 show that, under current arrangements, it is unlikely to be capable of delivering the enhancements required by the country.

  The NMS contains proposals to spend some £25 billion on enhancements over the next 12 years which have been proposed by Railtrack, the Shadow Strategic Rail Authority (sSRA), train operators and others. Railtrack has committed itself to only £4.2 billion of such expenditure in this period. Although Railtrack is partially justified in saying it is constrained by uncertainties caused by the Regulator's review of Track Access Charges, it is clear that it is placing the onus on funding the enhancement of the rail network squarely on the shoulders of the sSRA and Government.

  This is particularly true in the case of rail freight. The Transport White Paper supported the ambitious targets of the freight train operating companies to double the amount of rail freight in five years and treble it in 10. Both freight companies, Freightliner and, particularly, EWS, have invested heavily in new locomotives and rolling stock and freight movements by rail have increased significantly since privatisation. Between 1994-95 and 1999-2000 freight moved by rail (measured in billion tonne kilometres) increased by 41 per cent, but in the last two financial years the actual weight of freight taken by rail has been less than in 1997-98.

  The ambitious targets will not be met unless there are both improvements in the capacity for railfreight and in the capability of the network to take bigger loads—both higher and wider. Railtrack, however, in its NMS, does not commit any significant expenditure on freight and the train operators complain that track access charges for freight in the UK are already too high and that Railtrack wants a sizeable increase in charges following the review which will choke off future growth.

  The country needs a strategy to improve the key rail freight routes which serve the major road/rail terminals and ports. It has been left by Railtrack to the sSRA to carry this strategy through. Amongst the key improvements required for freight are:

    —  Increased Capacity for freight across and/or around London;

    —  Increased capacity, at high speeds, on or adjacent to the West Coast, East Coast and Great Western Main Lines;

    —  Piggyback Gauge (W11w) between the Channel Tunnel and Glasgow, and major terminals;

    —  Larger loading gauge (W10) to key ports including Southampton, Felixstowe and Thamesport.


  In the light of these uncertainties the Initiative believes it is necessary to consider in more depth the proposal being put forward by Central Railway plc for a new freight railway.

  Whilst the Initiative does not have the technical resources to make a full assessment, members have resolved follows:

    "that, given the increasing lack of capacity, which is threatening to inhibit the development of the railway for the twenty first century, the proposals by Central Railway be welcomed in principle, to encourage the company to investigate further the outstanding questions surrounding the concept, so that local authorities can be in a position to consider further endorsement."

  It is clear that a major problem for the proposal is to establish it politically at all levels, and to ensure that it is understood in the proper overall context. As a result the Initiative has established a Members' Working Group to see how the Initiative itself can help. The group of four members has representatives from all the main parties and from the different regions of Great Britain.

  The Company itself will no doubt be making a submission to the Committee setting out its reasons for promoting the project and the issues of need, funding and viability. The Initiative's position is that unless the project is given a chance to establish itself an opportunity for a major easing of the capacity restraints already referred to may be lost by default. This is because the raising of the funding even to carry out the full development stage of the project so that informed decisions can be taken stands on the willingness of funders to take on the risk involved. The current attitude of the sSRA appears to be fairly negative and may have the effect of preventing the input of the funding required at this point.

  The Initiative would therefore press the Committee to give the project an opportunity to justify itself, by gathering all the information necessary to enable a reasoned judgement to be made about its advantages and possible disadvantages.


  The Rail Regulator has to oversee Railtrack's performance with great care and must verify that commitments it enters into with train operating companies and others are capable of being delivered and eventually honoured. The problem caused by the agreement between Railtrack and Virgin on the West Coast Main Line provides a salutary lesson. The Regulator at the time should have satisfied himself that Railtrack was capable of delivering the WCML scheme to provide sufficient train paths for all the passenger and freight train operating companies as well as Virgin at a reasonable cost. As the assumptions made that moving block signalling could be used has since proved wrong, the scheme will now be much more expensive to provide the capacity for all users and there are continued doubts whether Railtrack will fully fund it. It is encouraging that the present Regulator appears to be taking robust action on this issue.

   It is clearly wrong that Railtrack continues to receive large bonuses despite rail passengers experiencing ever more delays and it is hoped that the Regulator's review will reward good performance and penalise poor performance. On track access charges, the Regulator must provide Railtrack with sufficient incentives to invest in enhancing the rail network for passenger and freight services, so that the train operators and Railtrack can both benefit as passenger numbers and freight tonnages grow. There also has to be far more transparency on charges, especially for freight, because the existing regime is extremely difficult for potential first-time rail freight users to understand.


  As has been stated above, it is clear to the Initiative that Railtrack does not have sufficient staff and financial resources to implement the necessary improvements and so the SRA has to take a direct interest in securing the development of the rail network by bringing in investment from sources other than Railtrack. This will include brokering joint ventures with Railtrack and other parties to jointly finance and manage projects. For example, the role the SRA is playing in the franchise replacement process, by encouraging train operating companies to invest in network improvements in exchange for longer franchise periods, needs to be expanded. The position in regard to the Central Railway proposal has been touched on earlier.

June 2000

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