Sam Sherwood-Hale spoke to Alex Veitch, Head of Multimodal Policy for Freight Transport Association about FTA’s expectations for the Rail Review and how freight is viewed in the rail industry…

What should be the main takeaway from FTA’s recommendations to the Williams Review?

While we would like to see some changes in policy to help grow capacity, the structure of freight is continuing to work reasonably well. Our main take away is that this review has been brought about in response to issues at the passenger level; freight is growing again now and we do worry if there are changes to fix a passenger problem those structural changes could stop the progress we’re seeing in freight. We worry about going back to ‘British Rail 2.0’ with vertical integration, however, Keith Williams has said he is not in favour of Network Rail running trains so hopefully this has already been ruled out.

We’ve asked DfT to clarify that they’re not going for a Japanese model and to rule some things out, even if at this stage they’re not going to rule anything in. Gradually the fog is lifting a bit for external stakeholders and it seems some form of new railway agency is on the cards. The next phase is to ask questions about this new agency. What would it do? Who would do franchising?

Our members transport goods across the UK – from Southampton to Scotland, for example – and there must be a central guiding mind to support building each route up. To access the network, you must have dedicated people to arrange that, as there is intense planning that goes into it. So, we are hopeful that the dystopian future has been ruled out, and if it has, we’d like the government to say so!

How do we fix ‘double counting’? 

When the DfT is letting a rail franchise, it has on occasion included paths that are currently allocated to a freight operator. In addition, sometimes the regulator must approve path allocation at very late notice because the public information has gone out about a new passenger timetable prior to formal approval being given. Then the freight operator may have to go through the process of appealing the decision. This brings us back to the ‘guiding mind’ having access to all the information so that only available paths are allocated to bidders – some form of giant spreadsheet showing all the capacity currently allocated – to ensure this doesn’t happen.

You mention freight operators bidding for routes that are held by passenger operators – are there particular areas of the country where you think this would be effective? 

This should be an easy fix.  When bidding is going on there is so much pressure on the bidder to show where they add value compared to other bidders that they need to make the best bid possible, so naturally they look to see how much capacity they can squeeze onto the network. This can occasionally lead to paths being allocated to passenger franchise services which have previously been allocated to freight operators. Looking at the examples there seems to be no major structural bias against freight, just siloed thinking, which can result in paths being let to bidders that shouldn’t be. There should be a streamlined methodology to solve those issues. A lot of these things are working really well already, but better sharing of information and an overall view of capacity is required.

What about the potential for a new agency? What form would this ‘guiding mind’ take? 

We’re not pushing for a new agency to be created, but if there is one it seems likely to be a combination of what the rail regulator handles on contracts and access and some of what DfT does in franchising, combined with some of what Network Rail does in operations.

Some of what we want, such as a change in how access to capacity is decided, needs new government policy, not huge structural reform. For example, ending “double counting” between franchises and freight operators can be resolved without the creation of a new agency. More broadly there needs to be the mechanics for conflict resolution where there are competing requests for the same capacity; but this doesn’t require a new agency to sort it out, it just needs decisions being made by the existing parties.

Why would vertical integration be so disastrous for freight? 

At the regional level there is financial separation between the parties involved.  If there was a hypothetical vertical integration between two parties (the infrastructure manager and passenger operator in that region) that would create an inbuilt systemic bias because both parties have the financial incentive to ensure that those services are as unimpeded and reliable as possible. If you are a freight operator that uses the route for a bit and then moves off to another region, will you be given equal weight when there is possession overrun? Is the freight company going to be able to get back up and running again in a reasonable amount of time? We would be turning the clock right back if we went for regional integration; when I heard Keith Williams say he doesn’t want Network Rail running trains that may be what he means.

Alex’s regular column ‘Delivering the Goods’ can be read on page 19 of this issue.