Examination of Witnesses (Questions 1
WEDNESDAY 1 NOVEMBER 2000
1. Good morning, gentlemen. You are most warmly
welcome to our inquiry. I am going to ask you to identify yourselves
for the record. Mr Johnson, in no particular order of precedence?
(Mr Johnson) Peter Johnson. I am the development director
of Cory Environmental. It is the largest commercial user of the
upper tidal reaches of the Thames.
(Mr Lowe) David Lowe, managing director
of Humber Barges Limited, a new barge operator based on the Humber
(Dr Hilling) David Hilling. I am United Kingdom vice-president
of the European River Sea Transport Union.
2. You have all submitted memoranda to us. I
take it that you do not mind if we go straight to questions. Can
we produce a significant increase in the quantity of freight carried
on inland waterways?
(Dr Hilling) Back in 1994, the Royal Commission was
talking about limited scope for transfer. Studies that were done
at that time came up with a figure of around 3.5 per cent. If
one translates that into current traffic on the waterways and
also total tonnages moved about the country, that would be a transfer
of around 60 million tonnes. That is one lot of cargo. I think
that may be a rather high figure. What we would be looking for
much more is a case of horses for courses, using water transport
where it fills the bill and where it is feasible. That is not
going to be across the whole board of transport. We have a service,
distribution based economy which is very dependent on road transport.
(Mr Lowe) I believe British Waterways have projected
the possibility of upping their tonnage to ten million. I would
think that was not unreasonable. Without trying at all, our company
has identified half a million tonnes per annum that we think we
could lift from road onto water. As an example, our local waterway,
the Aire & Calder Navigation, could quite easily take 2,000
lorries a day off the adjacent roads, which include the M62. I
would stress howeverand this does not in any way reduce
the impact or the importancethat very often getting traffic
off roads onto water can be of significant local or regional importance.
For example, many years ago I was involved in transferring about
3,000 tonnes a week of aggregate, short haul, about three miles.
That made a very significant difference to the number of lorries
passing through villages en route.
(Mr Johnson) I am looking at this from the waste management
angle. It is interesting that worldwide very few places transport
waste by water: Hong Kong, New York, Rotterdam, Amsterdam and
London. What is the scope for increasing that in London? Pretty
limited. We might get another 30 per cent or it might disappear
altogether. The rest of the country would be limited perhaps to
the Humber, Manchester Ship Canal and we are also looking at Gloucester
3. You are saying that three per cent is achievable
or you would expect it to be more than that or less than that?
(Mr Johnson) I would not expect it to be more than
4. What measures would you wish to see the government
take to encourage the transfer of existing traffic from the roads
onto inland waterways?
(Mr Lowe) First of all, we need to look at freight
facility grants and make them more easily obtainable. We need
more assistance with working out the environmental benefits. I
was rather disheartened recently to be told by the Department
dealing with these that we should not submit any more requests
for assistance on this basis. We should do it ourselves, but we
are not all necessarily economists. Grants for speculative traffics
are particularly difficult to get. Very many traffics are of a
spot nature and there are no contracts. We are told that speculative
assistance is possible, but there must be, if not a contract,
some kind of guarantee or assurances, but with spot traffics of
course there are not. Secondly, tolls. This is an archaic system
of charging. We recommend the abolition of tolls. Barges should
be licensed annually at a nominal figure with interavailability
between waterways, recognising that many barges cannot for reasons
of size or distance move between waterways. Very high tolls on
the waterways do impact and make it very difficult for us to attract
traffic. It is also difficult because if somebody comes to us
with, say, 200 tonnes of steel from A to B, we have to ring up
somebody in British Waterways, negotiate a toll; that person has
to refer to somebody else; they may be on holiday and cannot get
back to us for three weeks and so on. I understand, although I
am not involved in traffics elsewhere, at the moment anyway, that
tolls on the Manchester Ship Canal and the Thames are even higher.
We need to incentivise the navigation authorities so that they
would need some kind of grant payable. I am suggesting maybe a
penny per tonne. In other words, for licensed barges the waterway
administrations, would receive say a penny per tonne per mile,
to give them a bit of incentive. Finally, we are asking for improved
efficiency on the waterways so that it is easier for us to navigate.
There should be 24 hour access. It is ridiculous that, for example,
at the moment, if we want to go up the Aire Calder Navigation
on a Sunday, we have to give notice by the Friday. What road haulier
would have to do that?
Chairman: It might be a good idea. Shall I suggest
it to the Department?
5. What initiatives have you taken to encourage
freight onto the waterways?
(Mr Lowe) What we are doing at the momentand
we are in the early stages of thisis to obtain some barges
and refurbish them. We have looked at the possibility of obtaining
grants. We have not been successful yet for that work because
it is so difficult to get sufficient assurance from prospective
customers. We have also done a certain amount of marketing and
we have identified something like half a million tonnes per year
without too much difficulty.
6. What materials are you looking at there?
(Mr Lowe) Materials such as import and export coal,
aggregates, large quantities of steel and certain general cargoes
as well. Grain, for example. To give you an example, there are
a couple of mills situated waterside and we are in consultation
with them about having their grain taken directly to the mill
by water instead of by road.
(Dr Hilling) On the question of tolls, I know of specific
examples where companies interested in moving stuff by water were
put off simply by the fact that they could not find out precisely
what sort of tolls they would have to pay.
7. I wanted to come to the particular point
Mr Lowe made about the subsidy of a penny per tonne. Could you
go into a little more detail about that? I could not quite work
out who was going to pay this.
(Mr Lowe) At the moment, we pay tolls on the larger
waterways to the navigation authority or, to make it even more
complicated, the customer has to pay a toll. If you are trying
to introduce new people to this idea of getting traffic on the
water, these people are a bit confused. They do not understand.
If they send stuff by road, they do not have to pay a toll to
the road authority; what is going on here? Let's make it simple.
License the barges for a nominal fee per year to go anywhere.
Then, British Waterways and the navigation authorities are going
to say, "But where do we get our money from?" British
Waterways currently, I understand, receive £800,000 a year
in tolls, of which half is used for the marginal costs of maintaining
the waterways for trading and the other half presumably goes into
the pot, if you like. We need to give an incentive to the navigation
authorities in some kind of track access and my suggestion would
be that the government would pay as a grant to the waterway authority,
say, a penny per tonne mile.
8. This is in order to cover the waterways'
costs. You are saying that British Waterways take in tolls only
£800,000 a year?
(Mr Lowe) Yes.
9. They only spend £400,000 a year on maintaining
the waterways from those tolls?
(Mr Lowe) The additional costs of maintaining the
waterways for freight.
10. In terms of toll charges to a typical operatorhow
many operators are there who would end up paying a licence fee
under the arrangements you are suggesting to start with?
(Mr Lowe) I do not know how many operators there are
on the waterways altogether. You ask about the typical toll charge.
It is approximately, I understand, twice the Railtrack track access
charge in the case of British Waterways.
11. If you take a simple approach and look at
what it costs to take freight by boat, rail and road, how do you
(Mr Lowe) If you are going from waterside to waterside,
generally the cheapest mode is by water. It can even be the cheapest
mode using very small barges, in our experience. Obviously, the
larger the craft, the better.
(Dr Hilling) And over very short distances.
12. If it were a per tonne freight charge, what
would you charge? What would you estimate your competitors in
rail and road would be charging?
(Mr Lowe) Probably on a net cost we could transport
for about two-thirds of the road, possibly half in some cases.
That is a difficult one to answer just off the top of my head.
Where the additional costs come in, as rail finds, is with the
additional handling costs.
13. If you take what you are complaining about
as far as tolls are concerned and you take into account what grants
you have available, you are still going to be cheaper than any
of the competition, so it must be more attractive for people.
What is your problem?
(Mr Lowe) The problem is that for almost every traffic
you have transhipment and onward road haulage involved, which
brings us to the separate subject of encouraging people to site
(Dr Hilling) This is where the planning aspect comes
in. It is a case of getting any potential users of waterways on
the waterways and making sure they have direct access to them.
Mr Donohoe: In these circumstances, is it the
case that this freight facilities grant as it stands is effective
in being able to transfer freight from road and rail to you on
14. Can you give us some idea of the growth
in the traffic? The difficulty with the Committee is we must have
some estimate that we can use. If you have the advantage of lower
charges, can you give us some estimate of the difference that
that has made?
(Mr Lowe) It would be considerably helpful if there
were no toll charge because very often these traffics are marginal.
That 30, 40, 50, 60 or 70p a tonne, which is a lot, which the
track access charge might be at the present time, might make all
the difference to attracting the traffic to water. The problem
is that you have to add up the total costs of the movement from
A through B and C to D.
(Dr Hilling) It is very often the case that transhipment
transfer costs will make up 50 per cent of the total cost.
15. Mr Johnson is being very quiet. This does
not apply to you in quite the same way, does it?
(Mr Johnson) It does not in as much as all our movements
are within the Port of London Authority jurisdiction and there
are no track access charges. There are wharfage charges but they
are quite small. We do not suffer the toll problem, but I absolutely
agree that the problem is always that it is the water bit that
is cheap; it is the transhipment and onward movement that is expensive.
16. But that is there for everybody else. All
your competitors are having these charges.
(Mr Johnson) No, I beg to differ. Certainly it is
not in terms of waste. For example, to build a container and a
jetty on the Thames now is in the order of £10 million or
£11 million. You do not need that on a road. You just have
a forklift truck; you put the container on a lorry and it is gone.
That is £11 million versus £200,000. That is the sort
of difference that you are talking about. Therefore, in terms
of waste movements, you need very large flows to be able to make
17. Why do you not adapt? If they can put a
container on a lorry, you can put a container on a barge.
(Mr Johnson) No, because sadly the Thames is tidal.
You probably noticed that here. You have to build a jetty a long
way out into the water to have access to it.
18. Is it not true that the local authorities
prefer to use road transport for waste because it is cheaper for
(Mr Johnson) Indeed it is in many instances unless
you have very large movements. We have a fleet here that goes
past the window every day. If we replaced it today, it would cost
£40 million. You can buy an awful lot of lorries for £40
million and they can be very flexible. We can only go where the
river goes. The lorries can go anywhere. It is a tough battle
to be fighting.
19. The benefit presumably on that contract
is you have been doing it for a very long time. I think the Isle
of Dogs is involved. Presumably, the advantage to London authorities
is that you are shifting that degree of waste off the main roads.
(Mr Johnson) Yes. There are 100,000 lorry journeys
that are not on the roads of London.