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FTA concerned over ORR track charges proposal

The Freight Transport Association (FTA) has said that it remains concerned at the change of approach to freight track access charging and consequential longer-term implications for rail freight caused with ORR’s Periodic Review.

Responding to today’s announcement by the Office of Rail Regulation (ORR) regarding its decision of the change to track access charges for 2014-2019, the FTA has said that "there is still the need for better understanding of the rail freight market and the expectations of existing and potential new customers", and believes that the ORR’s final determination which will increase freight rates by 21% over the control period, 4% per year will be a major set back for promoting future growth for the sector if this is passed through in full to end users" .

Previously FTA had voiced its concerns to the ORR over the proposed higher track access charges stating that this could lead to intermodal and retail traffic being pushed back off rail and onto roads. In reply the ORR appears to have listened to and responded to the Association’s and industry’s serious concerns which were articulated during the consultation process, and capped the proposed increases below that initially intended, thereby reducing the impact of the new charging regime.

Chris MacRae, FTA Rail Freight Policy Manager:
"FTA remains concerned that the new higher freight track access charging announced today by the ORR which could still cause future uncertainty as to the direction of rail freight policy. We believe that rail must find ways of becoming more price competitive with road where costs to customers have gone down in real terms."

Today’s ORR decision has followed months of significant uncertainty, and rail freight operators and customers have tried to understand and come to terms with the proposals that would have added significant to moving goods by rail and potentially forcing companies that had invested in rail to turn their attention back to the roads.

FTA has noted that in the Determination the ORR has taken on board comments made by the Association on the track access charge review process and will take this into account in their governance issues going forward. FTA has also said that it welcomes that, and will work with the ORR to improve the process; adding that "what the freight industry doesn’t want is surprises and recognition of the longer term investment horizons for rail freight, including terminals, wagons and other equipment in future Determinations."

The new freight specific charges (FSC) cover commodities such as coal, nuclear fuel and iron ore, but ORR is to delay introduction and at a reduced level.

Mr MacRae added:
"FTA is pleased that ORR appears to have listened to our concerns regarding the impact the proposed charges could have on the freight industry, but it can not be assumed that existing traffic will simply stay on rail."

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