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


Examination of Witnesses (Questions 1 - 19)

WEDNESDAY 1 NOVEMBER 2000

DR DAVID HILLING, MR DAVID LOWE AND MR PETER JOHNSON

Chairman

  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 waterways.
  (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 however—and this does not in any way reduce the impact or the importance—that 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 and Sharpness.

  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 that, no.

Mr O'Brien

  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?

Mr O'Brien

  5. What initiatives have you taken to encourage freight onto the waterways?
  (Mr Lowe) What we are doing at the moment—and we are in the early stages of this—is 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.

Mr Blunt

  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 operator—how 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.

Mr Donohoe

  11. If you take a simple approach and look at what it costs to take freight by boat, rail and road, how do you compare?
  (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 waterside.
  (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 the water?

Chairman

  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.

Mr Donohoe

  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 this work.

  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.

Mrs Gorman

  18. Is it not true that the local authorities prefer to use road transport for waste because it is cheaper for them?
  (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.

Chairman

  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.


 
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