18 OCTOBER 2004

Mr Graham Smith

  Q120  Lord Swinfen: Would you have to change platforms to continental platforms almost at ground level?

  Mr Smith: You would not have to go to the step up that we see on the continent. You may have to draw some platform edges back. No route is the same in the United Kingdom and we are not saying that the Government should spend money that it has not got in immediately blasting across all routes throughout the United Kingdom, but I think we should identify the major centres of population, of consumption, of production, and start there. Our view is that if we can just get across to the major freight centres in west London, around the Wembley and Willesden areas from the Channel Tunnel Rail Link at Barking, that would be a good start.

  Q121  Chairman: I gathered from our Spanish witnesses last week that elsewhere in Europe they are investigating freight-only lines, even developing networks, and there is some discussion going on in the Commission on the survey potential there. Is that something that you are aware of and can you tell us more about it? Are you involved in that?

  Mr Smith: I believe that the European Commission's intention is to have freight primary routes perhaps, not freight-only lines. Most of Europe, like the United Kingdom, is a mixed traffic railway with a variety of passenger traffics and a variety of freight traffics, but by identifying freight primary routes, perhaps freight can get the priority running that it does not enjoy at the moment. As far as the United Kingdom is concerned, as part of the rail review process we have pointed out to the Government that routes, such as the Glasgow, South Western and Settle and Carlisle route, the North-East/South-West route across England, the route from the Channel Tunnel and the Haven Ports, all could be identified where freight trains perhaps might be seen more frequently than passenger trains. In Europe, with more and more high speed running with more and more capacity on what you might call the classic lines, those could become freight primary routes. Freight will never run, and does not need to run, at 140 or 120 miles per hour. There are certain parts of Europe where 100 or 90 miles per hour provides an attractive service but what freight needs is the reliability to keep going and to have the guarantee of the paths.

  Q122  Lord Shutt of Greetland: There has been a lot of discussion over the years about the Great Central route being reopened and so forth. Is that just a pipedream? Would that really help?

  Mr Smith: I think the concept of reopening that route is interesting but it would be incredibly expensive. The suggestion was that it would be reopened at a gauge where one could carry a complete lorry on a train, that there would be a lengthy tunnel underneath London and the traffic on that would be competing with traditional rail freight, Eurostar shuttles and cars. I think the issue with that route is the expense. The concept of having a route which is primarily for freight is very attractive but I think we do have to live in the real world, which is why I am not pressing the Government to open up the entire network to continental loading gauge, just one stage at a time.

  Q123  Lord Shutt of Greetland: You referred in your written evidence to inter-operability and that you are worried that action on that may raise the costs for British operators without compensating benefits. I think there is a feeling that perhaps the practitioner will not be listened to. Can you expand on this? What can the British Government do about it?

  Mr Smith: EWSI may well be a lone voice amongst the rail operators in the UK in supporting the general principle of inter-operability because as an international operator we can see benefits from common gauge, common braking systems, common systems of communication, but this is one of those areas where occasionally the Commission does get a bit carried away with itself and starts suggesting schemes which will be very expensive for a government to implement and impossible for a private sector operator to implement. In that part of our paper our primary concern was the European Rail Traffic Management System—ERTMS for short—which is a signalling system, that I am sure your Specialist Adviser can brief you on, which would be incredibly expensive to implement both in terms of communications systems and the amount of technical equipment that would need to be put inside locomotives which would fall to the operator to provide. As yet it is unproven technology. Indeed, the Swiss put it in as a trial system on one of their lines and once the trial is over they are going to rip it out and reinstate the traditional signalling so that it is compatible with the rest of their network. Sometimes the Commission can see a great technical idea, rush ahead with it, and perhaps does not think enough about how something can be funded.

  Q124  Lord Shutt of Greetland: Is there anything that the British Government can help with on this?

  Mr Smith: We have made representations to the British Government who, on the one hand, support the concept of inter-operability which for purely domestic operators in the UK has perhaps limited  attraction but with the increasing internationalisation of rail operation is more important, and at the same time we have pointed out to them the areas where the expenditure would be excessive and the benefits not seen. The Department for Transport have an international department who do represent the UK's interests in Brussels and I believe they are effective but they are only one voice amongst 25.

  Lord Shutt of Greetland: Thank you very much indeed. I do not think I need go on to the other point, my Lord Chairman.

  Chairman: Just touch on it briefly.

  Q125  Lord Shutt of Greetland: You did raise concerns about the cost of the European driving licence. Is an obvious answer not to make it applicable only to drivers of international trains?

  Mr Smith: Our view is that drivers want to be promoted, drivers may want to transfer, so a driver of an international train may not always be the driver of an international train and a domestic driver may aspire to be an international train driver. Connected with the question earlier about whether we would be able to hire drivers from SNCF, if we did not have drivers who were qualified to operate internationally, then we would be obliged to go to the state railway to supply them, but in having an international driving licence there is more freedom. What we object to in this process is the setting up of an expensive independent body to verify and to register drivers with international licences. We believe this is an area where self-certification and audit would be a far cheaper and far quicker way of implementing this policy. Again, it is one of these areas where the European Commission has grabbed an idea and perhaps gone a little too far with it.

  Q126  Lord Walpole: Can I just say, Mr Smith, although I am not absolutely clear about this, I came down by train today and it does seem to me the chance of being drawn by one of your engines is fairly great on ONE Anglia, is that correct? Do you let them have them because they are having problems?

  Mr Smith: We lease a number of EWS engines to ONE Anglia and to other operators as well. We do not just haul freight trains, we hire our drivers out and we hire our locomotives out. I believe ONE Anglia are moving across to using all of Virgin's old locomotives.

  Q127  Lord Walpole: Yes, I think so.

  Mr Smith: As someone who has got a flat in Cromer who uses that service on a regular basis, I share your concern.

  Q128  Lord Walpole: Are you satisfied that the new structure of the rail industry in Britain, as announced in the recent White Paper, will give adequate priority to international freight services?

  Mr Smith: It was slightly disappointing that the White Paper did not refer to international freight services but, by and large, I think it was good for rail freight because it offers the following things. One of its six principles was to create stability and certainty for rail freight operators, customers and investors. What it did say was that rail freight operators in the UK should have long-term access agreements, and shortly we will be applying for our long-term access agreement. Unlike the passenger, a rail freight customer will invest for up to 20 or 30 years and they need to be certain that there is always going to be room on the network for rail freight. The second was certainty of access rights, be it for international freight trains or domestic freight trains. The third, and arguably the most important, is that the charges that rail freight operators pay to use the track, which is significantly less than it costs to go through the Channel Tunnel, will be at stable and affordable levels. The Rail Regulator's review of freight access charges in 2001, which determined that rail freight would pay its wear and tear costs on the UK rail network but no more than that, was a significant boost to the rail freight industry and certainly gave a lot of our customers the encouragement to reinvest and to enter into long-term contracts.

  Q129  Lord Walpole: Can I just ask, does the track actually wear out more quickly if you use a selection of different sorts of vehicles on it, some of which may not have quite the same bogeys on them as others?

  Mr Smith: Absolutely. Wherever you go in the world, the laws of physics are the same. If you have got something with dodgy suspension, whether it is a freight train or a passenger train, they will bang the joints when it goes over them and if you have a really smooth suspension it will not. Damage to the track is a mixture of the volume passing over it, the axle weight and the speed of the train and it is a complicated mathematical formula that I—

  Q130  Lord Walpole: So the quality of maintenance of the vehicles is very important?

  Mr Smith: Absolutely, yes.

  Q131  Chairman: Could I thank you again. Is there anything that you would like to add in conclusion?

  Mr Smith: I think there is one further issue which you touched on with Lord Berkeley, which is the issue of the Channel Tunnel. Whilst we would hope to operate in mainland Europe in due course, perhaps even on a stand-alone basis, we have got to get through the Channel Tunnel to do that. Resolving the issue of Channel Tunnel tolls, to which Lord Berkeley referred, is critical. To have a solution for the future of Eurotunnel is equally important. We are having constructive discussions with the Department for Transport and the Strategic Rail Authority to get the toll issue resolved but until it is, it is perhaps difficult to be completely confident that international rail freight has a strong future. However, I do believe that the issue will be resolved because, as Lord Berkeley said, traffic levels at the moment could not bear the additional £26 million in Tunnel charges. In the long-term, providing there is a solution to Eurotunnel's future that meets everybody needs, I am absolutely confident that international rail freight will grow significantly and certainly my company intends to play a full part in that.

  Q132  Chairman: We share your aspirations and we hope very much that the picture that you have just drawn is one that comes about. Thank you very much indeed; we are very grateful to you for your evidence today.

  Mr Smith: Thank you, my Lord Chairman.