ORR Should Think Again on Freight Charges (RFG) 29th May 2012

ORR Should Think Again on Freight Charges

Rail Freight Group (RFG) today urged the Office of Rail Regulation to think again about its proposals for freight charging, which are outlined in its recent consultation document ‘Periodic Review 2013; Consultation on the variable usage charge and a freight specific charge’.


In a letter to Richard Price, Chief Executive of ORR, we stated that ‘We presently have significant concerns that the proposals as set out could have major repercussions for the stability of rail freight, for investor confidence, and for the prospects of continued growth’.


The ORR are proposing to levy an additional charge on operators moving power station coal, iron ore and spent nuclear fuel, which could amount to an additional £60m year. ORR suggests that this could lead to a traffic reduction of at least 10% in those sectors. ORR’s proposals also include making the charges different for each geographic area, as well as for each locomotive and wagon type, and introducing scarcity or capacity charges.


RFG suggests that the ORR may be giving undue weight to its duty to have regard to the funds available to the Secretary of State, perhaps at the expense of the duty to promote the use of the railway for the carriage of passenger and freight, and the duty to enable companies to plan their businesses with a reasonable degree of assurance.


Tony Berkeley, RFG Chairman, said today “The rail freight sector has been growing successfully in recent years, and customer and investor confidence is strong. These proposals risk destabilising this, and turning customers back to road, with its simple and straightforward pricing structure. Why does the ORR believe that causing a 10% drop in traffic complies with its duty to promote rail freight? ORR needs to look for different ways of achieving its objectives that are less damaging to rail freight operators and their customers”


ENDS