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Warning on rail freight charges

The UK’s Rail Freight Group (RFG) is concerned that higher access charges will drive traffic off the rails.
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The RFG has called on the Office of Rail Regulation (ORR) to take the “right decision for rail freight,” stating that “doubling freight track charges risks forcing traffic back to road and undermining rail freight in the UK.”

In January, ORR concluded that coal traffic should pay a significantly increased charge for using the rail network. Subsequent consultations, from ORR and Network Rail, the rail infrastructure authority, have raised the prospect of further rises across a range of commodity sectors, including a new levy for biomass, large increases in the general variable charge paid by all trains, and increased exposure from the performance, possessions and capacity regimes.

The combination of these proposals, if implemented, could double freight charges, with some bulk businesses being severely affected, says the RFG. ORR’s decision on whether to implement these increases are expected to be published as part of its ‘draft determination’ expected in the middle of June.

The RFG said it recognises that the pressure on rail industry costs means that some increase is inevitable, but the effect of implementing these proposals in total would be a significant and sudden rise in the cost of running rail freight, which would undoubtedly risk a loss of traffic back to road and contraction and possible market exit within the train operators. Investor confidence across the sector will also be damaged, risking future growth and job creation.

Maggie Simpson, RFG executive director, said: “We know that government, and ORR want to support a growing, efficient and vibrant rail freight sector. Pricing traffic off the network and undermining the financial stability of operators cannot be consistent with those aims and we strongly encourage ORR to take a decision on charges which is both affordable and balanced.”

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